Why would City of Atlanta lawmakers add the “poison pill” into their debt documents? Will this punish Buckhead residents?

What was actually included by the City of Atlanta in its recent debt issuance was an acceleration clause that gives the bond holders comfort that their collateral will be there when time for repayment. When municipalities issue general obligation debt, the bond holders’ collateral is the city’s tax base.

Given the discussion around a portion of City of Atlanta’s tax base being de-annexed, City of Atlanta officials did the fiscally responsible thing by including the acceleration clause. This allowed the City of Atlanta debt to be issued without the added concerns of collateral erosion and kept Atlanta’s borrowing costs competitive and reasonably low.