DEFINITION of 'Airport Revenue Bond'

A bond issued by a municipality or airport authority that uses the revenues of the airport facility to back the bond. An airport revenue bond is tax-exempt and is typically issued when a municipality or airport is looking to expand its facilities or pay for upgrades. Because this debt is issued by a municipality or airport authority it is more likely to have a lower interest rate, making the long-term financing costs for the airport lower.

BREAKING DOWN 'Airport Revenue Bond'

The tax-exempt status of an airport revenue bond may depend on the airport's mix of public and private use. The more an airport is used for private purposes rather than public, the less likely the bond will offer the full extent of tax-exempt options. The rating of this type of bond by credit analysts is dependent on the amount of traffic the airport receives, how well the airport performs financially and how likely it is that airlines will continue use the facility.

RELATED TERMS
  1. Municipal Bond Fund

    A mutual fund that invests in municipal bonds, or "munis." Municipal ...
  2. Tax-Exempt Sector

    The market niche comprised of investment vehicles exempt from ...
  3. Revenue Bond

    A municipal bond supported by the revenue from a specific project, ...
  4. Municipal Bond

    A debt security issued by a state, municipality or county to ...
  5. Public Purpose Bond

    This type of bond is used by municipalities to finance public ...
  6. After-Tax Basis

    A comparison of the net yields produced by taxable and tax-exempt ...
Related Articles
  1. Investing

    Buying a House Near an Airport? Consider These Factors

    Is buying a house near an airport advisable? The pros and cons.
  2. Personal Finance

    3 Things Travelers Wish They Had While Flying

    Traveling can sometimes be a hassle if things don't go as smoothly as you'd like. Having certain luxuries can make the trip a little easier.
  3. Investing

    3 Mexican Stocks Worth A Look

    Airports in Mexico seem to be the domain of public companies.
  4. Insights

    United Unveils LAX Lounge (UAL)

    The LAX United Club is part of a $573 investment by the airline at the Los Angeles airport.
  5. Investing

    Why Europe Has The Cheapest Airfare

    Airline deregulation, more airport choices and number of flights all affect how much flights cost.
  6. Investing

    A Look at the Pros and Cons of Muni Bonds

    Considering muni bonds? Here's a look at their pros and cons.
  7. Investing

    5 Reasons to Invest in Municipal Bonds When the Fed Hikes Rates

    Discover five reasons why investing in municipal bonds after the Fed hikes interest rates, and not before, can be a great way to boost investment income.
  8. Investing

    Think Twice Before Buying Tax-Free Municipal Bonds

    Municipal bonds are relatively safe, tax-exempt securities--but they are not without drawbacks. Due diligence is required.
  9. Financial Advisor

    Muni Bonds, Taxable Bonds or CDs: Which is Best?

    Here's how to tell if municipal bonds are a better investment than taxable bonds or CDs.
  10. Investing

    The Basics Of Municipal Bonds

    Investing in these bonds may offer a tax-free income stream but they are not without risks.
RELATED FAQS
  1. What do cities do with the funds generated from municipal bonds?

    Learn more about municipal bonds, including the various types of bonds issued and the purposes of municipal bond funds, such ... Read Answer >>
  2. Who or what is backing municipal bonds?

    Learn about the basics of municipal bonds, including the various revenue sources that are utilized to back or secure municipal ... Read Answer >>
  3. Your neighbor asks you about Municipal Bonds, you would be correct in telling him ...

    The correct answer is a): The two types of Municipal Bonds (Muni-Bonds) are general-obligation (GO) bonds and revenue bonds. ... Read Answer >>
  4. How do the returns on municipal bonds compare to those of other bonds?

    Learn how tax-free municipal bonds may provide better returns than other types of bonds, and understand the risks of municipal ... Read Answer >>
  5. How are municipal bonds taxed?

    Discover information about trading municipal bonds, specifically the various tax implications municipal bonds have at state ... Read Answer >>
  6. Where can I buy government bonds?

    The type of bond determines where you can purchase it, so you need to decide which type of bond you would like to purchase ... Read Answer >>
Hot Definitions
  1. Restricted Stock Unit

    Compensation offered by an employer to an employee in the form of company stock. The employee does not receive the stock ...
  2. Operating Ratio

    A ratio that shows the efficiency of a company's management by comparing operating expense to net sales. Calculated as:
  3. Expense Ratio

    A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual ...
  4. Pro Forma

    A Latin term meaning "for the sake of form". In the investing world, it describes a method of calculating financial results ...
  5. Trumpcare

    The American Health Care Act, also known as Trumpcare and Ryancare, is the Republican proposal to replace Obamacare.
  6. Free Carrier - FCA

    A trade term requiring the seller to deliver goods to a named airport, terminal, or other place where the carrier operates. ...
Trading Center