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. 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

    A debt security issued by a state, municipality or county to ...
  4. After-Tax Basis

    A comparison of the net yields produced by taxable and tax-exempt ...
  5. Taxable Municipal Bond

    A fixed-income security issued by a local government such as ...
  6. Combination Bond

    A bond, typically a municipal bond, that has financial backing ...
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. Taxes

    Will Uber Replace Airport Taxis?

    Is Uber ready to move into airport cab service or is it too soon? The company is burning investor cash at astronomical rates, but is it ready to overtake taxis in what is perhaps the last frontier ...
  3. 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.
  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

    Why Muni Bonds and Bond Funds are Perfect Together

    Municipal bonds and bond funds differ in several ways, which is partly why they complement each other well.
  7. Investing

    Consider These Municipal Bond ETFs

    Though relatively low-risk, there are still some factors to consider when taking the plunge into municipal bond ETFs.
  8. Investing

    A Look at the Pros and Cons of Muni Bonds

    Considering muni bonds? Here's a look at their pros and cons.
  9. Financial Advisor

    Why You Should Invest In Municipal Bond ETFs

    These versatile instruments have become popular with investors in higher tax brackets and fill a specific niche in the wide selection of fixed-income offerings.
  10. 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.
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. 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 >>
  4. What is the difference between municipal bonds and standard money market funds?

    The primary difference between municipal bonds - also known as "munis" - and money market funds is that municipal bonds are ... Read Answer >>
  5. 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 >>
  6. What is a triple tax-free municipal bond?

    At its core, a triple tax-free municipal bond is just like any corporate bond: it is a debt instrument, a loan given to a ... Read Answer >>
Hot Definitions
  1. Operating Cost

    Expenses associated with the maintenance and administration of a business on a day-to-day basis.
  2. Money Market

    A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. ...
  3. Block (Bitcoin Block)

    Blocks are files where data pertaining to the Bitcoin network is permanently recorded.
  4. Fintech

    Fintech is a portmanteau of financial technology that describes an emerging financial services sector in the 21st century.
  5. Ex-Dividend

    A classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be ...
  6. Debt Security

    Any debt instrument that can be bought or sold between two parties and has basic terms defined, such as notional amount (amount ...
Trading Center