DEFINITION of 'Combination Bond'

A bond, typically a municipal bond, that has financial backing from two sources: the issuing agency and the revenue from an existing or proposed source that will benefit from the funding.

Also known as "double barrel bonds".

BREAKING DOWN 'Combination Bond'

Combination bonds differ from obligation municipal bonds, which have just the "full faith and credit" backing of the issuing government agency, and revenue bonds, which only have the backing of future revenues. Because of the extra safety provided by combination bonds, they pay a lower rate than comparable general obligation or revenue bonds.

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