§ 26365 Bond Protection Against Competition

• •The government can promise not to build or buy similar projects while they owe money on bonds.
• •This promise is written in the bond agreement and must be followed.
• •The promise lasts until all the bonds are paid off.

A city builds a toll bridge and sells bonds to pay for it.

The city promises not to build another toll bridge nearby until the bonds are paid off. This keeps the first bridge making money without competition.