Income Or Revenue Bond

Revenue bonds are financed by the income generating facilities that the bonds are for.
Income or revenue bond. 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. Unlike general obligation bonds only the revenues specified in the legal contract between the bond holder and bond issuer are required to be used for repayment of the principal and interest of the 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. A revenue bond is a category of municipal bond supported by the revenue from a specific project such as a toll bridge highway or local stadium.
Revenue bonds on the other hand are bonds that are tied to a specific source of income. 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. Revenue bonds that finance income producing. General obligation bondholders are typically repaid with money collected from taxpayers.
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. A revenue bond is a special type of municipal bond distinguished by its guarantee of repayment solely from revenues generated by a specified revenue generating entity associated with the purpose of the bonds rather than from a tax. These bonds are primarily utilized by government entities to subsidize infrastructure projects. 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.
Corey boller nov 04 2020. A revenue bond could be issued for for example the drilling of an oil site. Other revenues and the general credit of the.