Obligation bond

A municipal bond with a face value greater than the value of the underlying property. The difference is designed to compensate the lender for costs exceeding the mortgage value.

Obligation Bond

In the United States, a municipal bond in which the face value is greater than the value of the property or project securing it. An obligation bond requires the issuing municipality to pledge its revenue to finish paying the bond. These bonds are intentionally designed this way and are used to compensate bondholders for any costs they incur that exceed the value of the project or purchase the bond is intended to finance.

References in periodicals archive ?

A general obligation bond is repaid directly by the state's taxpayers.

BONDS WORK BEST WHEN YOU FOLLOW THREE RULES

Under a general obligation bond, the amount will fluctuate (from person to person).

HART BOARD WEIGHING BONDS; FLEXIBLE TAX OPTIONS UNDER CONSIDERATION

However, according to board member David Pollock, a $25 million general obligation bond that the district tried and failed to pass in 1990 would have amounted to about $75 per parcel, he said.

MOORPARK DISTRICT WEIGHING BOND VOTE

One of them is a commission recommendation that would allow local general obligation bond issues to be approved by a simple majority of the voters.

EDITORIAL : TAXPAYERS BEWARE THE TWO-THIRDS RULE FOR PASSING LOCAL BOND ISSUES IS UNDER FIRE AGAIN

People who are living in homes don't want to be double-taxed both with the Mello-Roos district and the general obligation bond,'' said Carolyn Hansen, assistant superintendent of business services.

SCHOOL BOND EXEMPTIONS PROPOSED

The MOA stated that Irwindale proposed to finance the stadium by issuing general obligation bonds.