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A '''revenue''' bond is guaranteed only by expected revenues; as such, the possibility of default is greater. An example use for these bonds is an airport authority issuing them to renovate a passenger terminal; the facility charges (and other revenue from concessions, parking, etc.) are pledged to pay the bonds.
A '''revenue''' bond is guaranteed only by expected revenues; as such, the possibility of default is greater. An example use for these bonds is an airport authority issuing them to renovate a passenger terminal; the facility charges (and other revenue from concessions, parking, etc.) are pledged to pay the bonds.
==Issuance==
For most bonds, voter approval is required. Some jurisdictions allow some bonds (or notes) to be issued without approval for minor projects (such as to repave the City Hall parking lot), for emergencies (such as to replace a failing HVAC system in the county jail), or to cover items needed prior to a major project beginning (architect, engineering, and legal services, and long-lead items). In any event, public notice and hearing is required so that people may speak for or against the proposal.
If approved, rarely are all the bonds issued at once. Most proposals cover many major projects planned over several years, as the sheer availability of labor and materials would make it impossible for all the projects to be done at one time. Instead, bonds are issued in series (so as to minimize the debt level). Also, proceeds not needed immediately are invested to earn interest, thus lowering the total amount needed.
[[Category:Finance]]
[[Category:Finance]]