Project Completion Restriction


DEFINITION of 'Project Completion Restriction'

A type of clause, seen most often in municipal bond indentures, which requires the issuing party to sell debt securities (often in the form of revenue bonds) to finance the full completion of a particular project.

BREAKING DOWN 'Project Completion Restriction'

Project cash flow projections are rarely certain, and if construction costs exceed estimates, the debt issuer may reconsider the completion or the final structure of the project. A project completion restriction protects the interests of bondholders, as it forces the issuer to secure the debt financing needed to complete the project, which should produce the revenues needed to meet bond payment obligations.

  1. Indenture

    A legal and binding contract between a bond issuer and the bondholders. ...
  2. Restricted Asset

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  3. Death By A Thousand Cuts

    A failure that occurs as a result of many smaller problems. Death ...
  4. Issuer

    A legal entity that develops, registers and sells securities ...
  5. Infrastructure

    The basic physical systems of a business or nation. Transportation, ...
  6. Covenant

    A promise in an indenture, or any other formal debt agreement, ...
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