What are general obligation bonds secured by?

General obligation bonds are a type of municipal bond that are secured by the full faith and credit of the issuing government entity, which includes the full revenue base of that issuer. This means that the repayment of these bonds is not limited to a specific revenue source but is backed by the overall financial resources of the government, such as property taxes and other general revenues.

This broad security allows issuers to leverage their taxing power and financial stability to attract investors, as it assures them that there are multiple streams of funding available for repayment. The backing of the entire revenue base makes these bonds considered one of the safer investment options, as they are less likely to default compared to other forms of debt that might rely on more limited or specific revenue sources.

In contrast, the other options either specify limitations on the type of revenue securing the bonds or refer to non-governmental sources that do not apply to general obligation bonds.