2.4.6 Additional Debt

2.4.6 Additional Debt

Additional debt tests (often referred to as the additional bonds test or “ABT”) balance investors’ interest in not having revenues and assets securing the debt they hold be used to pay other debt and the public agency’s need to be able to borrow on favorable terms to meet future needs. These ABTs are to provide sufficient investor protection to allow the present issue to be sold on favorable terms without compromising the issuer’s ability to incur future debt on favorable terms.