Authority Bond

AAA

DEFINITION of 'Authority Bond'

A debt security issued by an authority, such as a corporate or government agency, for purposes of financing the operations of a revenue-generating public business. Investors in authority bonds have a claim to the business's revenues, which serve as the bond's yield.

INVESTOPEDIA EXPLAINS 'Authority Bond'

An authority bond is very similar to a municipal bond. Both are issued by an authoritative group, but the projects will typically be of differing natures. Additionally, authority bonds can incorporate margin protections, providing some insurance for the holders.

RELATED TERMS
  1. Yield

    The income return on an investment. This refers to the interest ...
  2. Margin

    1. Borrowed money that is used to purchase securities. This practice ...
  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. Financing

    The act of providing funds for business activities, making purchases ...
  6. Treasury Direct

    The online market where investors can purchase federal government ...
Related Articles
  1. The Basics Of Municipal Bonds
    Bonds & Fixed Income

    The Basics Of Municipal Bonds

  2. How Bond Market Pricing Works
    Bonds & Fixed Income

    How Bond Market Pricing Works

  3. Agency Bonds: Limited Risk And Higher ...
    Taxes

    Agency Bonds: Limited Risk And Higher ...

  4. Bond Basics Tutorial
    Retirement

    Bond Basics Tutorial

comments powered by Disqus
Hot Definitions
  1. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  2. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  3. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  4. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  5. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
  6. Bear Flattener

    A yield-rate environment in which short-term interest rates are increasing at a faster rate than long-term interest rates. ...
Trading Center