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Municipal bonds are debt securities issued by states, cities, counties and other governmental entities to fund day-to-day obligations and to finance capital projects such as building schools, highways or sewer systems.
The two most common types of municipal bonds are: 1. General Obligation (GO) Bonds, which are backed by the “full faith and credit” of the issuer, which has the power to tax residents to pay bondholders; and 2. Revenue Bonds, which are backed by revenues from specific projects, such as toll roads or bridges,
General obligation (GO) bonds are loans backed by a state or local government’s full faith and credit, generally including its authority to levy taxes, most often property taxes. Frequent issuers of GO bonds are states, counties, cities and school districts.
This document is intended to provide general guidance that helps local governments, investors, and other interested market participants understand how key quantitative and qualitative risk factors are likely to affect rating outcomes for local governments that issue GO bonds.
screte aspect of state and local borrowing. Chapter 2 provides an introductory overview of the most commonly utiliz. d types of municipal borrowing instruments. It describes the distinctive features of traditional types of bonds, such as general obligation bonds, revenue bonds, tax incre.
This article discusses the treatment of general obligation bonds in recent municipal bankruptcies; identifies the states that create a binding obligation to pay general obligation bondholders; describes problems of not treating general obligation bonds as secured; and proposes that states create clear laws that grant statutory liens for general ...
EXECUTIVE SUMMARY. transparent and clear disclosure of the payment sources and security protections afforded to General Obligation (GO) bondholders. Our concern has to do with whether GO bond documents have complete and appropriate disclosure relating to the presence of a state.
