The types of municipal revenue bonds are as numerous as the kinds of projects they are used to fund. As you can see, most of them are named for the projects that they finance. Here are the major types:
- Airport revenue bonds fund the construction of airports. Landing fees, fuel fees, and lease payments secure these bonds.
- Industrial revenue bonds finance public projects such as factories, industrial parks, and stadiums. Fees, concessions, and lease payments provide the backing.
- Public power revenue bonds pay for power plants. The sale of electricity provides the revenues.
- Hospital revenue bonds fund construction and renovation of hospitals and the buying of equipment. Hospital revenues, such as those from Medicare, are used to repay bondholders.
- Housing revenue bonds fund the construction of housing. They may cover single-family or multi-family housing units. Mortgage payments are the security. New Housing Authority bonds finance low-income housing.
- Student loan revenue bonds finance loans taken by college and university students.
- Transit revenue bonds pay for public transportation. Fares and government subsidies secure them.
- Water revenue bonds finance water and sewer projects. Connection fees and usage fees provide the revenues.
- Highway revenue bonds are used to build revenue-producing facilities such as bridges and toll roads.
- Toll road bonds are a sub-type, the revenues of which come from tolls. Gas tax revenue bonds are another sub-type of highway revenue bonds. Gas taxes, license fees, and other non-toll sources secure them.
- Special tax bonds are backed by excise taxes such as those on cigarettes and alcohol. They may also be backed by special assessments on those who will benefit directly from a particular project.
- College and university revenue bonds finance the construction of centers of higher learning. Bondholder payments include dorm fees and tuition payments.
- Double-barreled bonds receive backing from both revenue and the municipality's creditworthiness. They are a hybrid, and they may finance a variety of projects.
Revenue Bonds Finance Revenue-Paying Projects >>