Revenue Bonds Full Faith And Credit

The two most common types of municipal bonds are general obligation bonds bonds backed by the full faith and credit of the issuer and revenue bonds bonds backed by the revenues from a specific project or source.

Revenue bonds full faith and credit. The broadest and often most secure type of municipal bonds are known as general obligation bonds. Full faith and credit refers to the full borrowing power of a government that pledges to fulfill its payment obligations in a timely manner. General obligation bonds also called gos are bonds that are backed by the full faith and credit of the issuer with no specific project identified as the source of funds to repay the bond obligation. For these revenue bonds the common wealth may not pledge its full faith and credit because revenue bond creditors.

Typically since holders of revenue bonds can. General obligation bonds aren t tied to a specific revenue generating project. Is there something that could change our minds about illinois pension dilemma. Full faith and credit general obligation bonds are backed by the full faith and credit of the issuing municipality.

In addition municipal borrowers sometimes issue bonds on behalf of private entities such as non profit colleges or hospitals. Usually reve nues to be raised by a public project. In safety of principal general obligation municipal bonds are considered second only to. Treasury issues bills notes and bonds as a.

Because revenue bonds are not backed by the full faith and credit of the municipality that issues them the earnings of the revenue producing project must be large enough to cover the interest and principal payments. Rather they re backed by the full faith and credit of the municipality that issues them. Government and agency bonds. These are backed by the full faith and credit of the issuer including the power of the municipality to tax its citizens.

These bonds are typically issued by a public corporation or a sep arate public entity and are commonly payable from a direct source. While a revenue bond is backed by a specific revenue stream holders of go bonds are relying on the full faith and credit of the issuing municipality. General obligation municipal bonds.