Financial Dictionary

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Atlantic Financial

Atlantic Financial

Investment Word

Moral Obligation Bond

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A Moral Obligation Bond is a revenue bond which, in addition to its primary source also receives a state pledge to make up shortfalls in a debt service fund. There is no legal obligation for the state to make such a payment, but market participants recognize that a failure to honor the moral pledge could hurt the states creditworthiness.

Moral Obligation Bond - definition

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