Obligation bonds are a type of bond that is issued by an entity, usually a government or corporation, as a promise to repay borrowed money with interest on a specified date. These bonds are backed by the full faith and credit of the issuer, meaning they have a high degree of safety and reliability for investors. Obligation bonds can be used by governments to finance public projects or by corporations to raise capital for expansion or other purposes. Investors who purchase obligation bonds are essentially lending money to the issuer in exchange for interest payments over time, with the promise that they will receive their principal back at maturity.