Double Barreled Bonds are municipal bonds which carry both a revenue and general obligation pledge. Normally when a municipality issues a revenue bond to fund a project, they are not required to pick up the tab if the revenues from the project cannot cover bond payments. With double barreled bonds this is not the case. Should the project not generate enough revenue to cover bond payments, then the municipality is on the hook.
For example, a municipal bond which is backed by the revenues from a toll road, and is also guaranteed by the municipality issuing the bond, would be a double barreled bond. Because they carry double the backing of a traditional municipal bond, double barreled municipal bonds are often seen as some of the safest bonds available.
For more definitions and explanations please visit the Learn Bonds glossary where we give the meaning of many additional bond terms.
- What are Bonds?
- How to Buy Bonds in the UK & USA
- Municipal Bond Defaults, Safety, and Credit Ratings
- Municipal Bond Yields
- How to choose a municipal bond fund
- How to buy municipal bonds
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