Net Revenue Pledge

AAA

DEFINITION of 'Net Revenue Pledge'

A provision in a municipal bond issue that requires the issuing municipality to use net revenues (revenues left after expenses) from the project being financed to pay first the debt service costs of the issue.

INVESTOPEDIA EXPLAINS 'Net Revenue Pledge'

Similar to other restrictive provisions contained in bond indentures, a net revenue pledge serves to make the bond issue less risky for bondholders. Since the pledge effectively forces the government to use revenue from its debt-financed projects to pay debt service costs first, bondholders enjoy a reduced risk of default.

RELATED TERMS
  1. Indenture

    A legal and binding contract between a bond issuer and the bondholders. ...
  2. Municipal Bond

    A debt security issued by a state, municipality or county to ...
  3. Project Finance

    Defined by the International Project Finance Association (IPFA) ...
  4. Revenue Bond

    A municipal bond supported by the revenue from a specific project, ...
  5. Surrender Period

    The amount of time an investor must wait until he or she can ...
  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. Weighing The Tax Benefits Of Municipal ...
    Taxes

    Weighing The Tax Benefits Of Municipal ...

  3. Bond Basics Tutorial
    Retirement

    Bond Basics Tutorial

  4. How long can I hold my HH/H Bonds and ...
    Bonds & Fixed Income

    How long can I hold my HH/H Bonds and ...

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  4. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  5. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
Trading Center