Revenue Bonds

Revenue Bonds are a type of municipal bond that is secured by the Revenue generated from a specific project or source, rather than from the general taxing power of the issuing municipality. These Bonds are typically issued to fund projects like toll roads, bridges, airports, or public utilities, and the interest and principal payments are made from the income produced by these projects.

Examples:

• Toll Road Revenue Bonds: Issued to finance the construction of a toll road, with repayments coming from tolls collected from motorists.
• Airport Revenue Bonds: Used to fund the expansion of airport facilities, with payments derived from airport Revenues, including ticket sales and rental fees from shops.
• Water and Sewer Revenue Bonds: Issued to improve municipal water and sewer systems, with repayments made from user fees charged to residents and businesses.

Case: In 2013, the City of Atlanta issued Revenue Bonds to finance improvements to its wastewater treatment facilities. The Bonds were secured by the Revenue generated from water and sewage fees, ensuring that the funds for repayment would come directly from the users benefiting from the upgrades.