Double Barreled

AAA

DEFINITION of 'Double Barreled'

A municipal general obligation bond in which the cash flows are pledged by two distinct and different entities. One entity will make interest payments, and the other, the principal payments. These are municipal general obligation (GO) bonds as opposed to revenue bonds because they are ultimately backed by the issuer and its taxing power.

Double-barreled bonds are sometimes referred to as "combination bonds".

INVESTOPEDIA EXPLAINS 'Double Barreled'

These bonds, as specified by their trust indenture, are municipal general obligation bond issues. For example, assume a local city issues a double-barreled muni bond to raise funds for a new toll road bypass. In the event that the cash flows from the tolls are unable to cover the interest and/or principal payments (debt service), the shortage would be covered by the issuing city from its general fund. These bonds are thus backed by both the toll revenue stream and the full faith and credit of the issuing city.

RELATED TERMS
  1. Revenue Bond

    A municipal bond supported by the revenue from a specific project, ...
  2. Double Dipping

    For brokerage firms, when a broker puts commissioned products ...
  3. Double Gearing

    Used to describe situations where multiple companies are using ...
  4. Sub-Sovereign Obligation - SSO

    A form of debt obligation issued by hierarchical tiers below ...
  5. Combination Bond

    A bond, typically a municipal bond, that has financial backing ...
  6. General Obligation Bond - GO

    A municipal bond backed by the credit and "taxing power" of the ...
Related Articles
  1. Municipal Bond Tips For The Series 7 ...
    Insurance

    Municipal Bond Tips For The Series 7 ...

  2. The Basics Of Municipal Bonds
    Bonds & Fixed Income

    The Basics Of Municipal Bonds

  3. Avoid Tricky Tax Issues On Municipal ...
    Taxes

    Avoid Tricky Tax Issues On Municipal ...

  4. Why Retirees Can't Count On Muni Bonds
    Taxes

    Why Retirees Can't Count On Muni Bonds

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center