Encyclopedia of Municipal Bonds: A Reference Guide to Market Events, Structures, Dynamics, and Investment Knowledge

U

ultra vires

This Latin term meaning “beyond the power of men” is used to describe bonds that have been invalidly issued. Municipalities often used such claims to repudiate debt in the nineteenth century, particularly in the Reconstruction South and in the railroad-mad West, which led to the growth of the bond counsel business. In modern times, the Washington Public Power Supply System default in 1983 was caused by a judge ruling that a majority of the participants in the system had entered into contracts without the specific authority to do so, thus invalidating the bond payments and causing the largest default, $2.25 billion, in the history of the municipal market.

See also bond counsel; Chapter 9; default; Washington Public Power Supply ...