moral obligation debt

moral obligation debt definition - business

moral obligation debt

Government or municipal debt that carries an implied pledge of support, but that is not explicitly guaranteed by the full faith and credit of the guarantor organization. Moral obligation debt is generally issued in order to circumvent legal restrictions on borrowing. The securities are rated lower and carry higher yields than general obligation bonds of the same issuer.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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