Project Completion Restriction

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Indenture

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

    Money or other items of value received by or promised to an organization, ...
  3. Death By A Thousand Cuts

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

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

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

    The basic physical systems of a business or nation. Transportation, ...
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. What You Need To Know About Preferred ...
    Trading Strategies

    What You Need To Know About Preferred ...

  4. Understanding The Bond Behemoth That ...
    Mutual Funds & ETFs

    Understanding The Bond Behemoth That ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center