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 ?
the Districts General Obligation Bond ratings were upgraded by all three rating agencies (to Aaa by Moodys) and Income Tax Bond ratings remain strong;
San Antonio maintains a strong financial position with a "AAA" general obligation bond rating from all three major rating agencies.
In March 2006, Sarasota voters overwhelmingly approved a General Obligation Bond to construct and equip a new Sarasota Police Headquarters.
2-31, which means they began working with the government prior to the $3.5 billion General Obligation bond issue completed Mar.
The rating review was an outcome of S&P's recent revisions to its local general obligation bond criteria released in September 2013.
In addition, the committee approved a 2012-13 tax rate of $2.0074 per $1,000 of assessed value, and a levy of $1,938,377 for payment of general obligation bond principal and interest.
On Tuesday, the State of Georgia sold a general obligation bond offering worth USD997m.
Ellis announced affirmation of the STATE OF UTAH's "AAA" bond rating and the completion of a landmark $1 billion general obligation bond sale, which secured record-low borrowing costs for the state.
In November, more than 65 percent of residents voted in favor of the project and granted Jamestown authority to adopt a city sales and use tax to pay for the general obligation bond issue of the school district.
The 'AAA' general obligation bond rating could come under downward pressure in a significant and long-lasting decline in the district's tax base and economy, which Fitch believes is unlikely.
Jim Justice, announces that it has awarded another General Obligation Bond project: the Mileground to Airport Road project in Monongalia County.
In other words, outstanding nursing home bonds defaulted at a rate that was 421 times greater than that of outstanding general obligation bonds, and CDD bonds defaulted at a rate that was 1,521 times the general obligation bond rate.