Government Bonds

[David]

When a city government runs out of reserves, there are two potential ways to handle the situation:

1) Implement a new bond system allowing the government to issue bonds and raise fund. (the design draft is included below.)
2) Implement a simplified system where the local government just borrow money from the bank, pretty much like how private companies currently take loans.

Government Bonds (design draft)

Credit rating – there is a credit rating for the government. It affects the government’s ability to issue new bonds.
the interest rate of the bond is affected by the credit rating.

AAA credit rating – lowest interest rate, highest possible loan issue amount.

C credit rating – higher interest rate, lower loan issue amount.

Unlike Bank loan, bond has an issue date and a mature date. When the bond matures, the government has to repay the bond owners with cash.

If the government is short on cash, the government will have to issue another new bonds to raise the fund to repay the old bonds.

If the government is unable to issue new bonds, the government will bankrupt. When a city goes bankrupt while the player is the mayor, the player will lose the game and the game will end.

Variables on the “Issue Bonds” interface
Issuing Bond Price - $999
Interest rate – 9.99%
Number of bonds - 999999
Maximum number of bonds that can be issued – this value is set by the system and cannot be changed by the player.
Repayment Period – 99 years (ranging from 1 year to a maximum of 30 years.)
Fund to be Raised - $9999999

On the lower part of the screen, it will show a list of outstanding bonds
Issue price interest rate issue date mature date
10 years bonds $100 6.5% 1 Jan 2014 1 Jan 2017

Total amount of outstanding bonds - $9999999

Annual interest payment
Annual interest payment – you make interest payment to bond holders annually.

Interest payment: annually

[dvsmasta]

The bond will be purchasable by AI and player corporations and that is where the money comes from for bonds?

If so that would be a very nice feature.

[Arcnor]

I hope the bonds will be purchased by the companies and people. There simply isn't enough financial products to purchase currently in the game.

[radovan]

Please do not end the game if the city goes bankrupt. Player is still a businessman running a corporation, he should, instead of just ending the game, lose the control over city.

[David]

Please do not end the game if the city goes bankrupt. Player is still a businessman running a corporation, he should, instead of just ending the game, lose the control over city.

Don't worry, the game won't end this way.