Obligation bond

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.
Under a general obligation bond, the amount will fluctuate (from person to person).
In May 2004, district voters approved by a wide margin a $450 million general obligation bond authorization which addresses district-wide improvements as well as establishes five new community campuses for underserved or rapidly growing areas in the county.
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.
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.
Shelby County's long-term 'AA' general obligation bond rating is based on a deep, diverse economic base; solid and improving financial reserves; and above-average but manageable debt burden.
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.
The county maintains a formal capital improvement plan, whose local portion has been historically financed with $16 million in voter-approved general obligation bond authorizations every two years.
SAN FRANCISCO -- Fitch rates King County, WA's $53,000,000 Limited Tax General Obligation Bond Anticipation Notes 2006, Series A and $31,445,000 Limited Tax General Obligation Bond Anticipation Notes 2006, Series B 'F1+'.
The series 2006 bonds represent the final issuance from a Proposition 39 general obligation bond authorization approved by a wide margin of voters in November 2002.
Los Angeles' debt issuance has increased lately, the result of successful general obligation bond elections.