2.4.6.2 Additional Debt Payable from the Same Source

As an alternative or in addition to the above, bond documents may limit the public agency’s ability to incur additional debt payable from a stream of tax, enterprise, or other revenues. The public agency must generally confirm that it is not in default on outstanding debt, and must satisfy various financial tests, apart from limited circumstances such as refundings for savings or debt required to complete a revenue producing facility. Additional debt requirements generally vary with the relative payment priority (senior, subordinate, or parity) of the proposed new debt, with the public agency allowed significantly greater flexibility if the new debt will be subordinate to the existing debt.