Gross Debt refers to the total amount of outstanding [debt]( that a municipality may owe investors or other creditors. Often, muni bondholders look at a municipality’s gross debt and compare it to its gross assets in order to determine its liquidity ratios.
For example, suppose that a municipality has $1 billion in gross debt. While this would not be an issue for a municipality with $100 billion in assets, it would be a significant problem for a municipality with less than $1 billion in assets, as it may be unable to cover the debts.
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