General Obligation (GO) Bond vs Revenue Bond
A municipal bond backed by the issuer's full faith, credit, and taxing power. A municipal bond repaid only from the revenue of a specific project.
What is the difference between General Obligation (GO) Bond and Revenue Bond?
GO = backed by taxes, usually needs voter approval. Revenue = backed only by the project's income, no voter approval, feasibility study instead.
| General Obligation (GO) Bond | Revenue Bond | |
|---|---|---|
| In one line | A municipal bond backed by the issuer's full faith, credit, and taxing power. | A municipal bond repaid only from the revenue of a specific project. |
| Example | A city issues GO bonds to build schools, repaid from property taxes. | A toll road authority repays its bonds from toll collections. |
| Unit | Bonds & Cash Equivalents | Bonds & Cash Equivalents |
| Series 65 | Section 2: Investment Vehicles | Section 2: Investment Vehicles |
What is General Obligation (GO) Bond?
Repaid from general tax revenue. Because it pledges taxpayers' money, a GO issue typically needs voter approval. Credit analysis focuses on the tax base, debt per capita, and the local economy.
What is Revenue Bond?
Backed by user fees from the financed facility - tolls, airport fees, water charges - not by taxes. No voter approval is required; a feasibility study supports the issue instead. Generally riskier than a GO bond from the same issuer, since the project must succeed.