Income And Revenue Bonds

General obligation or go bonds are backed by the general revenue of the issuing municipality while revenue bonds are supported by a specific revenue source such as income from a toll road hospital or higher education system.

Income and revenue bonds. General obligation bondholders are typically repaid with money collected from taxpayers. Revenue also referred to as sales or income forms the beginning of a company s income statement and is often considered the top line of a business. These bonds are primarily utilized by government entities to subsidize infrastructure projects. While a revenue bond is backed by a specific revenue stream.

In other words the money raised by the bond offering directly finances the project and the project once complete generates the revenues to pay back the interest and principal on the bonds to investors. An income bond is a type of debt security in which only the face value of the bond is promised to be paid to the investor with any coupon payments paid only if the issuing company has enough. Revenue bonds are another type of muni bond that is backed by the revenue generated by a specific project being financed by the bond issue.