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Bond issued by a municipality, state, or public agency authorized to build, acquire, or improve a revenue-producing property such as a waterworks, electric generating plant, or railroad. Unlike general-obligation bonds, which are repaid through a variety of tax sources, revenue bonds are payable from specified revenues only, usually the revenues from the facility for which the bond was originally issued. Revenue bonds typically pay interest rates higher than those of general-obligation bonds. The separation of the revenue bond obligation from a municipality's other bond obligations allows the municipality to circumvent legislated debt limits.
Variants of REVENUE BOND
revenue bond or limited obligation bond
This entry comes from Encyclopædia Britannica Concise. For the full entry on revenue bond, visit Britannica.com.