Different Types of Debt Obligations
Not what you're looking for?
Analyse different types of debt. Address the following in your paper
General Obligation bonds
Revenue Bonds
Certs of Obligation
Commercial Paper
Capital leases
Notes payable
Purchase this Solution
Solution Summary
The expert analyzes the different types of debt.
Solution Preview
Introduction:
There are different types of debt that often face an organization or local government and it is imperative that organizations how these different types of debts impact the organization. This paper analyses the different types of debts.
General Obligation bonds :
General obligation (GO) bonds are those debts issued by the local government to help raise funding for public spending and are often fully backed by the taxing power and the credit of the municipality that is issuing these debt instruments. In this sense the municipality commits the resources at its disposal to be able to pay the bondholders. Such debt instruments helps the local governments be able to fund projects that would not directly bring in revenues such as parks, roads and bridges among others. General Obligation bonds are low risk debt instruments and this is the reason that they are attractive to bondholder since they are often backed by the credit and full faith of the local governments issuing them and defaulting is very law as the local governments can use various resources to repay the bondholders (Bonds 200, 2012a).
The key advantage of this type of debt is that they are low risk and rate highly among investors. This is because of the local government's power to tax and can therefore raise such taxes in order to be able to repay bondholders. Such bonds are also callable where the municipal can call the bonds earlier than their maturity period thereby being able to avoid any future adverse changes in interest rates that may impact the value of the bonds for the municipal government. This implies there is almost zero risk of defaulting in such a debt instrument increasing the ...
Purchase this Solution
Free BrainMass Quizzes
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce