JAPAN LOCAL GOVERNMENT BOND ASSOCIATION
TOP＞Overview of Local Government Bonds in Japan＞Public offering Local Government Bonds with jointly-negotiated issuance terms
Public offering Local Government Bonds with jointly-negotiated issuance terms
・Joint obligation
Under Article 5.7 of the Local Finance Act, Local Governments that offer Local Government Bonds nationally issue bonds jointly under their names and under joint obligation, every month.
Article 5-7 of the Local Finance Act:

Two or more local public bodies may issue bonds jointly following approval of their respective assemblies. These local public bodies shall be collectively responsible for the redemption of the Local Government Bonds and the interest payments.
・Funds (liquidity enhancement)
Apart from the joint obligation, a fund is established at a trustee bank using a portion of issuers' redemption funds for liquidity enhancement. This is in order to ensure that issuers can repay principal and interest in a timely manner even if unforeseen circumstances arise as a result of a natural disaster.
Specifically, the 30 issuing Local Governments set aside 10% of the largest monthly principal and interest payment in a given fiscal year.
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