§ 26318 Bond Security Covenants

• •This law lets a group (like a school board) make promises when they borrow money by selling bonds.
• •The promises are meant to make sure the people who buy the bonds feel safe about getting their money back.
• •The group can decide what promises to make, as long as they think it’s a good idea.

A school district wants to build a new school, so they sell bonds to raise money.

The school board can make promises, like 'We will always keep the school buildings in good shape,' to make sure the people who buy the bonds trust that they’ll get their money back.