What is an obligor?
An obligor, also known as a debtor, is a person or entity who is legally or contractually obliged to provide a benefit or payment to another.
Who is the obligor of an investor?
For example, an investor may have a legal obligation to disclose his/her investments to the SEC. In this circumstance, the obligor is the investor. See also: Obligee. Farlex Financial Dictionary. © 2012 Farlex, Inc.
What is an obligor on a bond?
The bond itself is actually sold by the obligor to a principal, generally, a contractor or subcontractor who has agreed to perform some action or body of work for a hiring entity, known as the obligee in the arrangement.
What is the difference between debtor and obligor?
The term obligor is often used interchangeably with debtor. West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved. (ah-bluh-gore) n. the person or entity who owes an obligation to another, as one who must pay on a promissory note.
Is obligor same as borrower?
More Definitions of Loan Obligor Loan Obligor means any of Borrower, the Guarantors and any other endorsers, guarantors or obligors, primary or secondary, of any or all of the Indebtedness.
Who is the debtor or obligor?
A person who owes a legal obligation to another person. In the context of financing arrangements, an obligor is usually a debtor (for example, a borrower) or someone who has given security or a guarantee for the payment of a debt or the performance of an obligation.
Who is an obligor?
OBLIGOR – One who is bound by an obligation; the promissory, or person obligated to do something. OCCUPANCY – In insurance terminology, this refers to the type of property and how it is used.
What is the difference between obligor and issuer?
Issuer: The party or vehicle that issues the debt. There are approximately 45,000 active issuers in the municipal market. An Issuer can borrow for itself or as a conduit for another entity. Obligor: The “credit” behind a deal – the ultimate source of payment of principal and interest.
Is obligee a creditor?
Obligees are either several or joint, an obligee is several when the obligation is made to him alone; obligees are joint when the obligation is made to two or more, and, in that event, each is not a creditor for his separate share, unless the nature of the subject or the particularity of the expression in the ...
Who is the obligor in a sale?
In a financial contract, such as a sale of a property or a loan given out for the purchase of a property, the obligor is the party that is contractually obligated to provide a benefit or payment -that is the buyer of the property, or the debtor in the case of the loan, respectively.
Is a guarantor and obligor?
At law, the giver of a guarantee is called the surety or the "guarantor". The person to whom the guarantee is given is the creditor or the "obligee"; while the person whose payment or performance is secured thereby is termed "the obligor", "the principal debtor", or simply "the principal".
Which parent is the obligor?
In the court-ordered child support set out a financial obligation between the two parents. The custodial parent becomes the obligee or the one receiving the child support. The non-custodial parent becomes the obligor or the one that is required to pay the child support.
What is an obligee on a bond?
Who is the Obligee? The obligee is the party requiring the principal to obtain a surety bond. They are usually government agencies, local municipalities, individuals, or companies. The surety bond safeguards the obligee from the failure of the principal to uphold their part of the agreement.
What is obligor and obligation?
Obligor — the obligated party This term refers to a person bound by a legal obligation. For example, the spouse in a child-support determination proceeding responsible for making the child-support payments is called the obligor. The obligor can get in significant trouble if he or she does not satisfy this obligation.
Who is obligor in Securitisation?
The Obligor(s): The Obligor is the Originator's debtor (borrower of the original loan). The amount outstanding from the Obligor is the asset that is transferred to the SPV. The credit standing of the Obligor(s) is of paramount importance in a securitisation transaction.
Obligors Explained in Less Than 4 Minutes
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Definition and Examples of an Obligor
In a personal setting, an obligor is an individual who is legally bound to another person, known as the obligee. They are required to fulfill the agreements outlined in a contract or legal agreement. If the agreement isn’t met, the obligor could face legal consequences.
How an Obligor Works
You could find yourself acting as an obligor in either a commercial or personal setting. For instance, if you’ve ever taken out a loan, then you’ve acted as an obligor to your lender. You’re legally bound to make all principal and interest payments on the loan.
Obligor vs. Obligee
Two common legal terms you’ll hear associated with this term are obligor and obligee. Though the words are similar, the definitions are very different in a legal context.
Obligor in a Corporate Setting
Covenants can be either affirmative or negative. An affirmative covenant is something that the obligor is required to do, such as the need to hit specific performance benchmarks. A negative covenant is restrictive in that it stops the obligor from doing something, such as restructuring the leadership of the organization.
Obligor in a Personal Setting
An obligor is not required to be a bond holder or a holder of some other form of debt. Someone can become an obligor in his personal life, too. In family law, there are certain cases when a court order is handed down – in a divorce settlement, for example – that requires one of the parents to pay child support to the other parent.
Further Reading
The economic role of jumps and recovery rates in the market for corporate default risk – www.jstor.org [ PDF]
What Is An ‘Obligor’
Explaining ‘Obligor’
Obligor in A Corporate Setting
Obligor in A Personal Setting
- An obligor, also known as a debtor, is a person or entity who is legally or contractually obliged to provide a benefit or payment to another. In a financial context, the term “obligor” refers to a bond issuer who is contractually bound to make all principal repayments and interest payments on outstanding debt. The recipient of the benefit or paymen...
Further Reading
- An obligor is a person who is legally bound to another. Debt holders are the most common types of obligors. However, in addition to the required repayment of interest and principal, many holders of corporate debt are also contractually required to meet other requirements. For a bond holder, these are called covenants and are outlined in the initial bond issue between the obligor and obli…