Combination Bond

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.

RELATED TERMS
  1. Revenue Bond

    A municipal bond supported by the revenue from a specific project, ...
  2. Bond Buyer 20

    A representation of municipal bond trends based on a portfolio ...
  3. The Bond Buyer

    The Bond Buyer is a municipal bond market daily trade publication. ...
  4. Bond Buyer 11

    An average yield on a particular day of 11 selected general obligation ...
  5. Bond Buyer Index

    An index published by The Bond Buyer, a daily finance newspaper ...
  6. High-Yield Bond

    A high paying bond with a lower credit rating than investment-grade ...
Related Articles
  1. Mutual Funds & ETFs

    Why Muni Bonds and Bond Funds are Perfect Together

    Municipal bonds and bond funds differ in several ways, which is partly why they complement each other well.
  2. Bonds & Fixed Income

    The Basics Of Municipal Bonds

    Investing in these bonds may offer a tax-free income stream but they are not without risks.
  3. Bonds & Fixed Income

    How To Invest In Corporate Bonds

    Understand the basics of corporate bonds to increase your chances of positive returns.
  4. Investing Basics

    4 Ways Bonds Can Fit Into Your Portfolio

    If you're looking to have some bonds in your portfolio for 2012, we tell you what to look for.
  5. Home & Auto

    How To Choose The Right Bond For You

    Bond investing is a stable and low-risk way to diversify a portfolio. However, knowing which types of bonds are right for you is not always easy.
  6. Bonds & Fixed Income

    Muni Bonds, Taxable Bonds or CDs: Which is Best?

    Here's how to tell if municipal bonds are a better investment than taxable bonds or CDs.
  7. Bonds & Fixed Income

    A Look at the Pros and Cons of Muni Bonds

    Considering muni bonds? Here's a look at their pros and cons.
  8. Insurance

    Municipal Bond Tips For The Series 7 Exam

    Learn to distinguish between general obligation and revenue bonds to ace this test.
  9. Bonds & Fixed Income

    Should You Consider Muni Bonds?

    Municipal bonds come in two types. General obligation bonds repay their holders through taxes. They often have low interest rates, but they’re safe.
  10. Bonds & Fixed Income

    Find The Right Bond At The Right Time

    Find out which bonds you should be investing in and when you should be buying them.
RELATED FAQS
  1. What do cities do with the funds generated from municipal bonds?

    Learn more about municipal bonds, including the various types of bonds issued and the purposes of municipal bond funds, such ... Read Answer >>
  2. How do the returns on municipal bonds compare to those of other bonds?

    Learn how tax-free municipal bonds may provide better returns than other types of bonds, and understand the risks of municipal ... Read Answer >>
  3. What determines the price of a bond in the open market?

    Learn more about some of the factors that influence the valuation of bonds on the open market, and why bond prices and yields ... Read Answer >>
  4. How are municipal bonds taxed?

    Discover information about trading municipal bonds, specifically the various tax implications municipal bonds have at state ... Read Answer >>
  5. What is the difference between municipal bonds and standard money market funds?

    The primary difference between municipal bonds - also known as "munis" - and money market funds is that municipal bonds are ... Read Answer >>
  6. How stable are municipal bonds?

    Read about the safety and stability of the municipal bond market, and learn how that stability has been undermined since ... Read Answer >>
Hot Definitions
  1. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  2. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  3. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  4. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  5. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  6. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
Trading Center