Definition of Net Debt to Assessed Valuation

Net Debt to Assessed Valuation A measure of the municipal issuer’s ability to meet its debt obligations and to raise additional revenue through property taxes.

Applying "Net Debt to Assessed Valuation" to Securities Exams:

When evaluating the safety and quality of a municipal GO bond it is important to understand how much debt the municipality has issued relative to the value of the property within the issuer’s boarders. The revenue to support the issuer’s debt service comes from property taxes. The lower the net debt is relative to the assessed value of the property the safer the bonds are.

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