€ provincial bonds are actually debentures because they are promises to pay and noprovincial assets are pledged as security. the value of the bonds depends on theprovinces ability to pay interest and repay principal. provincial bonds are second in quality only to government of canada bonds becausemost provinces have taxation powers second only to the federal government. municipalities typically raise capital from market sources through instalmentdebentures or serial bonds. part of the bond matures in each year during the term of thebond. broadly speaking, a municipalitys credit rating depends on its taxation resources.all else being equal, a municipality with many different types of industry is a betterinvestment risk than a municipality built around one major industry.
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