View frequently asked questions (FAQ) for Indiana Finance Authority.
Appropriation Debt: Bond issues of some agencies or authorities carry a potential state liability for making up shortfalls in the issuing entity's obligation. (Fabozzi, Frank J. (2009). Institutional Investment Management: Equity and Bond Portfolio Strategies and Applications.Hoboken: John Wiley & Sons, Inc.)
The IFA primarily issues Appropriation-Backed Debt. As required by the Indiana Constitution, (Article 10, Section 5), the State of Indiana does not issue General Obligation (GO) Debt. The IFA also issues conduit debt; a key point is that this debt is the responsibility of the conduit borrower. Investors in conduit debt should not look to the IFA or the State of Indiana as a guarantor of this debt.