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

1. 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