Definition

Noun: A type of municipal bond issued by a government entity or public authority specifically to raise capital for constructing, improving, or acquiring public utility infrastructure (such as water, sewer, gas, or electric systems). The bond is secured solely by the revenue generated from the utility service's operations and user fees, not by the taxing power of the issuing government.

Usage

This term is used in the contexts of public finance, municipal investing, and infrastructure development. It describes a specific debt instrument for funding essential public services.

Examples

• The city council approved issuing a utility revenue bond to fund the new water treatment plant.
• Investors were attracted to the utility revenue bond due to the stable income from the city's electric system.
• Unlike general obligation bonds, repayment of a utility revenue bond depends on the project's financial success.

Advanced Usage

• Revenue-backed security: A utility revenue bond is a classic example of a revenue-backed security, where the credit risk is tied directly to a specific income stream.
• Essential service financing: The issuance of a utility revenue bond is a common method for financing capital-intensive projects for essential public services without directly raising taxes.

Variants and Related Words

• Revenue Bond (n): The broader category of bonds repaid from specific revenue sources, which includes utility revenue bonds, toll road bonds, and airport revenue bonds.
• Municipal Bond (n): A debt security issued by a state, municipality, or county to finance public projects. Utility revenue bonds are a type of municipal bond.
• General Obligation Bond (n): A contrasting type of municipal bond that is backed by the full faith, credit, and taxing power of the issuing government, rather than a specific revenue stream.

Synonyms

• Public utility bond
• Utility bond (in specific financial contexts where the revenue-backed nature is implied)

Related Phrases

• Bond issuance for utilities: The process of offering and selling utility revenue bonds to investors.
• Revenue pledge: The legal promise that the income from the utility will be used first to repay the utility revenue bond holders.

Noun

1. a bond issued to finance the construction of public utility services