revenue bond
Học thuậtThân thiện
Definition
Noun: A type of municipal bond issued to finance a specific revenue-generating public project, such as a toll road, airport, or utility system. The bond is repaid exclusively from the income generated by that project, not from general taxes or the issuer's general funds.
Usage
A revenue bond is a debt security where the source of repayment is a specific stream of income. * The city issued a revenue bond to fund the new water treatment plant, which will be paid back through user fees. * Unlike general obligation bonds, revenue bonds carry risk tied directly to the financial success of the project they finance.
Advanced Usage
- Project-Specific Security: The term emphasizes that the bond is secured by a pledge of revenues from a particular facility or enterprise. It is not a claim on the issuer's full faith and credit.
- Investor Consideration: When evaluating a , investors must assess the viability and demand for the project (e.g., traffic volume for a toll bridge) rather than the taxing power of a municipality.
Variants and Related Words
- Municipal Bond: A broader category of debt securities issued by states, cities, and other local government entities. are a subset of municipal bonds.
- General Obligation Bond (GO Bond): A contrasting type of municipal bond repaid from the issuer's general funds and backed by its taxing power, not by project revenue.
Synonyms
- Project bond (in a specific public finance context)
Related Phrases
- To be backed by revenues: Describes the security for the bond.
- The airport expansion revenue bond is backed by revenues from passenger facility charges.
- Revenue pledge: The legal commitment of project income to repay the bond.
- The bond's indenture includes a revenue pledge from the utility's customer payments.
Noun
- a bond issued by an agency that is commissioned to finance public works; revenue from the public property is used to pay off the bond