Glossary of Municipal Securities Terms


Typically refers to a bond issued by a state or local government that is payable from general funds of the issuer, although the precise source and priority of payment for general obligation bonds may vary considerably from issuer to issuer depending on applicable state or local law. Most general obligation bonds are said to entail the full faith and credit (and in many cases the taxing power) of the issuer, depending on applicable state or local law. General obligation bonds issued by local units of government often are payable from (and in some cases solely from) the issuer’s ad valorem taxes, while general obligation bonds issued by states often are payable from appropriations made by the state legislature. See: FULL FAITH AND CREDITLIMITED TAX GENERAL OBLIGATION BOND; UNLIMITED TAX BOND. Compare: LIMITED TAX BONDMORAL OBLIGATION BOND; REVENUE BOND; SPECIAL ASSESSMENT BOND; SPECIAL OBLIGATION BOND; SPECIAL TAX BOND.

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