Airport Revenue Bond

AAA

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.

INVESTOPEDIA EXPLAINS '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. Airport Tax

    A tax levied on passengers for passing through an airport. The ...
  2. Tax-Exempt Sector

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

    A mutual fund that invests in municipal bonds, or "munis." Municipal ...
  4. Municipal Bond

    A debt security issued by a state, municipality or county to ...
  5. Tax Exempt

    To be free from, or not subject to, taxation by regulators or ...
  6. Exempt Employee

    The term “Exempt Employee” refers to a category of employees ...
Related Articles
  1. Bonds & Fixed Income

    The Basics Of Municipal Bonds

    Investing in these bonds may offer a tax-free income stream but they are not without risks.
  2. Bonds & Fixed Income

    Find The Right Bond At The Right Time

    Find out which bonds you should be investing in and when you should be buying them.
  3. Taxes

    Avoid Tricky Tax Issues On Municipal Bonds

    Learn the rules every investor should know before buying into this "tax-free" investment.
  4. Mutual Funds & ETFs

    Fatal Seduction Of The Municipal Bond Insurers

    Learn how a foray into CDOs and other exotic products ruined an industry's image.
  5. Entrepreneurship

    New Tech Capitals Emerging In Various U.S. States

    While Silicon Valley has long been recognized as the home of tech giants, an increasing number of cities around the country are attracting tech startups.
  6. Options & Futures

    Options and Roth IRAs: Do's and Don'ts

    A breakdown of the do's and don'ts of trading options in a Roth IRA.
  7. Investing

    How To Invest Outside Your Comfort Zone?

    Sometimes, when it comes to investing, we have to step outside of our comfort zone and use investment tools to express a market view or specific outcome.
  8. Investing

    How Do Millennial Women Invest?

    The theme for Women’s History Month is “Make it Happen”, and that is exactly what millennial women are doing when it comes to their investments.
  9. Taxes

    OK, So I'll Be Smarter Next Tax Time

    5 tax resolutions to start on right now for a smoother tax return next April 15.
  10. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.

You May Also Like

Hot Definitions
  1. Asset Class

    A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same ...
  2. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  5. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  6. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
Trading Center