revenue bond: meaning, definition, pronunciation and examples
C1Formal/Financial
Quick answer
What does “revenue bond” mean?
A municipal bond whose repayment is secured by the revenue generated from a specific project or source (e.
Audio
Pronunciation
Definition
Meaning and Definition
A municipal bond whose repayment is secured by the revenue generated from a specific project or source (e.g., a toll bridge, airport, or utility) rather than by general taxation.
A type of public finance debt instrument where investors are paid back from the income produced by the funded facility. It represents a claim on project revenue, not on the general credit of the issuing government body.
Dialectal Variation
British vs American Usage
Differences
Concept and term are identical in both financial contexts. British usage may more frequently encounter the term in relation to privatised infrastructure or PFI (Private Finance Initiative) projects.
Connotations
Neutral financial/technical term in both. In public policy discourse, can carry connotations of 'user-pays' models versus taxpayer-funded models.
Frequency
More frequent in American financial and governmental discourse due to the scale of the US municipal bond market. Common in UK financial news regarding infrastructure investment.
Grammar
How to Use “revenue bond” in a Sentence
[Municipality/Authority] issued revenue bonds to finance [Project].The revenue bond is secured by [specific income source].Repayment of the revenue bond depends on [revenue stream].Vocabulary
Collocations
Examples
Examples of “revenue bond” in a Sentence
noun
British English
- The council proposed a revenue bond to fund the new district heating network.
- Investors were wary of the revenue bond's dependence on future passenger numbers.
American English
- The city issued a revenue bond to expand the convention center.
- The water utility's revenue bonds carried a AA- rating.
Usage
Meaning in Context
Business
Common in corporate finance discussions of public-private partnerships and infrastructure investment.
Academic
Used in economics, public finance, and political science papers analysing debt instruments and infrastructure funding.
Everyday
Rare. Might appear in local news about new toll roads, stadiums, or utility projects.
Technical
Core term in municipal finance, bond trading, credit analysis, and public accounting.
Vocabulary
Synonyms of “revenue bond”
Strong
Neutral
Weak
Vocabulary
Antonyms of “revenue bond”
Watch out
Common Mistakes When Using “revenue bond”
- Using 'revenue bond' interchangeably with any government bond. Confusing it with a 'corporate bond'. Omitting the essential 'revenue' specifier and just saying 'municipal bond', which is a broader category. Misspelling as 'revenew bond'. Incorrect stress on the first syllable of 'revenue' in speech (/riːˈvɛnjuː/).
FAQ
Frequently Asked Questions
Typically, yes. Because repayment depends solely on the success of a specific revenue-generating project, rather than the general taxing power of a government. The credit risk is tied to project performance.
Yes, through brokers or financial advisors, often as part of a municipal bond fund. They are commonly purchased by institutional and individual investors seeking tax-advantaged income.
The bond may default or fail to make scheduled interest/principal payments. Bondholders have a claim on the project's revenue but usually no recourse to the issuer's general funds. Covenants in the bond agreement may trigger restructuring.
In the United States, interest from most municipal revenue bonds is exempt from federal income tax and often from state and local taxes if the investor resides in the state of issuance. Rules vary by country and bond structure.
A municipal bond whose repayment is secured by the revenue generated from a specific project or source (e.
Revenue bond is usually formal/financial in register.
Revenue bond: in British English it is pronounced /ˈrevənjuː bɒnd/, and in American English it is pronounced /ˈrevənuː bɑːnd/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “on the revenue (colloquial in finance for 'funded by project income')”
- “ring-fenced revenue”
Learning
Memory Aids
Mnemonic
Think: REVenue bond = REpaid from Venture income. The bond is tied to the financial success of the specific venture it funds.
Conceptual Metaphor
FINANCING IS BRIDGING (a bond bridges the present funding gap with future project revenue). PROJECT IS A SECURITY (the project itself becomes the collateral).
Practice
Quiz
What is the primary security for a revenue bond?