COPs are debt issued by municipalities that circumvent the voter referendum process. If the "project' that is being financed with the bond proceeds does not generate enough revenue to service the debt, the municipality has to ask its "legislature" to budget the debt service requirement. The projects can range from building new schools, jails, museums, leaseback of government office buildings, or performing arts centers, as examples. COPs are considered to be a moral obligation of the issuer. Legally they could opt not to make the necessary debt service payments and not be in violation of any bond covenants. COPs should be unlimited tax general obligation debt. COP debt is normally rated either one or two notches below its G.O. debt rating. A strong argument can be made that if a municipality decided not to budget for this type of debt service, even though they are legally entitled to make this decision, the bond market would punish them rather severely if this decision was made. It is normal for a municipality to include COP debt service in their budgetary process in the current environment. Will "entitlement reform" at the State and local government change this budgetary practice? If the answer is "yes" and State and local governments opt not to budget for their COP debt service, I would expect the credit rating agencies to take a punitive view of this action with corresponding credit rating downgrades. The municipal bond market cannot tolerate a massive downgrade in perceived credit quality at this juncture of budget reform taking place across the 50 states.