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. Investopedia Says:
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. Related Terms:
Closing Costs
Face Value
Mortgage
Municipal Bond |