A municipal bond in which interest and principal are backed by the full financial resources and creditworthiness of the issuing municipality. Differently stated, this bond is guaranteed by the full faith and credit power of the issuer. The bond’s obligation is settled using general revenue and borrowings, and hence the name “general obligation bond”. Therefore, this bond is of higher quality than bonds secured by a specific project or a limited guarantee. Some issuers sell general obligation bonds backed only by their faith and credit as opposed to those backed by an issuer’s full faith and credit.

The lower level of repayment risk associated with such a bond means that bondholders receive lower returns.

This bond is also known as an OG bond.