Utility Revenue Bond

  

Categories: Bonds

See: Revenue Bond.

It's just a bond floated by a utility (power company, water company, gas company) backed by the revenues of the utility itself.

So...what are the odds we don't need water anymore? Electricity? Gas? Yeah, low odds. So these bonds generally get floated at low interest rates, and only extremely rarely go bust.

Related or Semi-related Video

Finance: What is an Airport Revenue Bond...8 Views

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finance a la shmoop what is an airport revenue bond, well it's just uh [A muni bond on the table]

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muni bond people don't get all uptight let's go through security here alright

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well there are many flavors of muni bonds and airport is a popular one all [Different flavors of muni bonds]

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right you know what a muni bond is generally safe, backed by the local

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government but you know sometimes people get nervous about them because well

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frankly a lot of municipalities are going bankrupt particularly California

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Stockton, San Bernardino even Orange counties in trouble so investors like

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the safety of muni bonds with revenue attached and hence we have the airport [Airplane takes off from airport]

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muni bond backed by revenues from the airport and the you know clever name

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Well in this country a whole lot of airports were

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initially built by the military so those were federal dollars put to work but

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once the runway was in and there was access for parts and fuel while the

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military generally lost interest oh and the effect that wars went away kinda [Tanks waiting]

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helped so they didn't really need the fancy bathrooms with the

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mother-of-pearl tile and sink knobs you know military people well they can use a [Military man peeing in the bushes]

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tree or a bush most of the time they're tough so lots and lots of upgrades have

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been needed for airports over the last decades especially with the advent and

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popularity of private aviation...Airports issue muni bonds backed by their ability

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to collect things like landing fees overnight motel airplane parking fees

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premiums placed on jet fuel and a bunch of other revenue sources that small

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airports lean on to pay for the upgrades they've installed. Sometimes the city [People walking through airport terminal]

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issues the bond and the city owns the airport and at other times it's just the

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airport itself but done as a muni bond so that the airport gets a really low

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interest rates from the locals so yeah that's an airport revenue bond and it's [Man holding airport revenue bond on a plane]

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a you know muni in the bank...

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