What is ‘Obligation Bond’
A municipal bond used to secure a mortgage on property or other physical assets that can be liquidated. The face value of the bond is greater than the value of the property itself.
Explaining ‘Obligation Bond’
An obligation bond creates a personal obligation on the part of the borrower to compensate the lender for costs in excess of the value of the mortgaged property or assets, such as closing costs or transaction costs.
Further Reading
- Comparative costs of negotiated versus competitive bond sales: new evidence from state general obligation bonds – www.sciencedirect.com [PDF]
- Tax increment financing, economic development professionals and the financialization of urban politics – academic.oup.com [PDF]
- Financial reporting and municipal bond rating changes – www.jstor.org [PDF]
- The economics of structured finance – www.aeaweb.org [PDF]
- Rank order analysis of state general obligation bond ratings – link.springer.com [PDF]
- Financial disclosure and bond insurance – www.journals.uchicago.edu [PDF]
- Risk premia and the pricing of primary issue bonds – www.sciencedirect.com [PDF]
- The information content of municipal bond rating changes: A note – www.jstor.org [PDF]
- Default risk cannot explain the muni puzzle: Evidence from municipal bonds that are secured by US Treasury obligations – academic.oup.com [PDF]
