Washington Demand Bond

• Category: Civil Procedure - Bonds
• State: Multi-State
• Control #: US-00415BG
• Format: Word; Rich Text

Description

A Bond is a document with which one party promises to pay another within a specified amount of time. The term "demand" means that the principal plus any interest is due on demand by the bondholder rather than on a specific date. Bonds are used for many things, including borrowing money or guaranteeing payment of money. A bond can be given to secure performance of particular obligations, including the payment of money, or for purposes of indemnification. The validity of a "private" bond, payable upon demand, is determined by the same principles applicable to contracts generally. The purpose of the bond must not be contrary to public policy; it must be supported by a valuable consideration; and there must be a clear designation of the obligor and the obligee. A bond procured through fraud or duress may be unenforceable, but mistake on the part of the obligor as to the contents of a bond, or its legal effect, is not a defense to enforcement of the bond.

A Washington Demand Bond is a type of financial instrument issued by the state of Washington that allows investors to lend money to the state for a fixed period of time. It is considered a debt instrument used to finance various infrastructure projects, such as schools, roads, bridges, and other public works. The state government guarantees the repayment of the principal and interest to the investor upon demand, hence the name "Demand Bond." These bonds are often used by individual investors, institutional investors, and mutual funds looking for a secure investment option with a predictable return. As they offer a fixed interest rate, they provide stability and reliability to investors seeking a steady income stream. The interest earned from Washington Demand Bonds is typically exempt from federal income taxes, making them an attractive investment for those in higher tax brackets. There are different types of Washington Demand Bonds available to investors: 1. General Obligation Bonds (GO Bonds): These bonds are backed by the full faith and credit of the state government. They are secured by the state's ability to levy taxes and are considered the safest type of bond issued by the state. 2. Revenue Bonds: These bonds are backed by the revenue generated from specific projects they finance, such as toll roads or utility services. The repayment of principal and interest is dependent on the success and profitability of the project being financed. 3. Limited Tax General Obligation Bonds: These bonds are secured by a limited, specified tax source, such as property or sales taxes. Unlike regular GO Bonds, they have a specific revenue stream dedicated to repayment. 4. Moral Obligation Bonds: These bonds are backed by the moral commitment of the state government to repay, but they do not have a legal obligation to do so. Repayment relies on the legislature's willingness to appropriate funds if the source of revenue initially designated for repayment falls short. Investing in Washington Demand Bonds requires careful consideration of the investor's risk tolerance, time horizon, and financial goals. It is important to consult with a financial advisor or do thorough research before making any investment decisions.