Obligation Bond
A municipal bond used to secure a mortgage on property or other physical assets that can be liquidated. The face value of the bond is greater than the value of the property itself.
Investopedia Commentary
An obligation bond creates a personal obligation on the part of the borrower to compensate the lender for costs in excess of the value of the mortgaged property or assets, such as closing costs or transaction costs.
Related Links
The Basics of Municipal Bonds
See also: Closing Costs, Face Value, Mortgage, Municipal Bond