General Obligation

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Kutak Rock has been issuing legal opinions in general obligation bond financings for four decades. Over that time, our public finance attorneys have represented our clients in more than 2,000 general obligation bond issues aggregating more than $50 billion in total principal. Our experience includes representing governmental entities ranging from states, state-level authorities and large urban cities to small school districts, towns, counties and improvements districts, and includes representations as bond counsel, disclosure counsel and special tax counsel. We also routinely act as underwriter’s counsel to national and regional investment banks and purchaser’s counsel to commercial banks and other buyers of general obligation bonds.

Constitutional and statutory requirements for general obligation bonds vary from state to state and careful consideration must be paid to ensure the validity of a bond issue. Because general obligation bonds are backed by the full faith and credit of the issuing entity and are generally paid from ad valorem property taxes, in many states these requirements include a vote of the people before bonds can be issued. Our public finance attorneys have extensive experience in guiding issuers through the complexities of the election process as part of our bond counsel representations.

Our experience also extends to so-called “limited tax” general obligation bonds, in which property taxes securing the payment of the bonds are limited to a certain rate or amount. These structures are often imposed by authorizing authorities on development districts at a stage before development has begun and are in many ways more similar to revenue bonds than traditional general obligation bonds. Our expertise in working with the limitations presented by limited tax bonds enables us to help our clients avoid common pitfalls that may trap the unwary.