Issuer
A state, political subdivision, agency or authority that borrows money through the sale of bonds or other securities.
bond-basics
Debt Limit
Statutory limit on the amount of debt an Issuer can incur or have outstanding at any one time. Primarily applicable to Governmental Bonds, the statutory or constitutional limit on the amount of debt an Issuer can incur or have outstanding at any one time. A debt limit is often stated as a percentage of the Issuer’s assessed valuation. The types of debt subject to the limit are specified in the statutes or constitution, or in some cases, may have been determined by the courts, and so a Debt Limit may not apply to all Bonds or municipal obligations of an Issuer (e.g., it may not apply to Revenue Bonds, non-appropriation debt or certificates of participation (“COPs”)).
At the federal level, Congress imposes a limit on the borrowing capacity of the U.S. government. Once reached, the U.S. Department of Treasury can and often does begin implementing extraordinary measures, which frequently include the suspension of new issuance of State and Local Government Series (SLGS) securities.
See Also
Start with the Bond Basics
Hundreds of Terms and Concepts
Variable Interest Rate
The interest rate on a bond which varies according to a formula set forth in the bond or the indenture or bond resolution/ordinance or based on the interest rate required by a remarketing agent to remarket the bonds at par.