What is a State of California General Obligation (GO) bond?
When you buy a GO bond issued by the State of California, you make a loan to the State. The State uses your money to build schools, university buildings, hospitals, housing, roads, mass transit facilities, parks, water delivery systems and other projects. The bond you receive in return for your money is, in effect, an IOU the States promise to repay the amount of money borrowed (the principal), plus interest, in a specified period of time. GO bonds are backed by the full faith and credit of the State. The principal and interest on all GO bonds are paid out of the States general fund.
