general obligation bond

Also found in: Dictionary, Thesaurus, Acronyms, Encyclopedia, Wikipedia.
Related to general obligation bond: Limited Tax General Obligation Bonds

General Obligation Bond

In the United States, a municipal bond in which the issuing locality pledges to use all revenues at its disposal to pay bondholders, including the raising of property taxes. Should a sufficient number of residents not pay their property taxes that it impacts revenue for bondholders, the terms of the bond legally require the municipality to raise property taxes to make up the shortfall. There are two basic types of general obligation bonds. A limited GO allows for the raising of property taxes up to a certain percentage, while an unlimited GO theoretically allows the municipality to levy taxes of up to 100% of a property's value. Because an unlimited GO provides a great incentive to pay property tax on time, and because many states only allow such a bond to be issued following a vote on the matter, credit ratings agencies usually rate them higher. However, both types of GO are generally rated highly.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

general obligation bond (GO)

A municipal debt obligation on which interest and principal are guaranteed by the full financial resources and taxing power of the issuer. This broad promise makes a general obligation bond of higher quality than issues secured by a particular project or a more limited guarantee. It also results in lower returns to bondholders. Also called full-faith-and-credit bond. See also revenue bond.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
The interest and principal of these bonds are paid out of solely the income of the particular enterprise and may be less secure than general obligation bonds. For that reason, they generally sell at lower prices to yield a higher return.
When looking at securities of general governments and school districts, general fund securities involve greater risks than do general obligation bonds. Much depends on the management quality and financial practices (e.g., pension and OPEB funding) of the specific issuers, but to the extent that there are general government defaults, this is the sector in which they are most likely to occur.
General obligation bonds traditionally are considered as secured debt, making them one of the safest bets for investors.
(2) Insured municipal bonds can provide a 10 to 15 basis point yield advantage over AAA-rated general obligation bonds. General obligation bonds are typically issued by a municipality which might be rated Baa or A.
OKLAHOMA CITY Competition was tight for buyers of Oklahoma City's latest round of general obligation bonds Tuesday, city Finance Director Craig Freeman said.
The City of Sarasota, Florida recently finalized the refunding of it's Series 2007 General Obligation Bonds, resulting in a savings of $6.4 million--nearly $291,000 for every year through fiscal 2037.
The state reported in a regulatory filing it expected to offer $5 million of the tax-free Series C general obligation bonds through Monday.
Those certificates - tax-exempt securities that don't include a promise to repay and typically use the project being constructed as collateral - carry higher interest rates than general obligation bonds, which are fully backed by the state's credit and, ultimately, its general fund.
The board also supported the initiative to allow the issuing of general obligation bonds for Arkansas water, waste disposal and pollution abatement facilities.
Proposition 401 would allow the district to float $951 million in general obligation bonds to build 1.6 million square feet of new space at 10 campuses in Maricopa County, buy land for new campuses, replace obsolete technology, remodel buildings and repair equipment and infrastructure.
The MOA stated that Irwindale proposed to finance the stadium by issuing general obligation bonds. In 1988, the state legislature passed a statute that precluded the city's use of such bonds to build a stadium.

Full browser ?