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. Issuer

    A legal entity that develops, registers and sells securities ...
  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 FAQS
  1. No results found.
Related Articles
  1. Bonds & Fixed Income

    The Basics Of Municipal Bonds

    Investing in these bonds may offer a tax-free income stream but they are not without risks.
  2. Taxes

    Weighing The Tax Benefits Of Municipal Securities

    Find out how to determine whether the tax exemption offered by "munis" benefits you.
  3. Economics

    What Would Happen If Interest Rates Rise?

    This time around, while U.S. long-term yields have rebounded from their January lows, rates have generally been lower than where they ended 2014.
  4. Investing

    Strategies To Position Your Bond Portfolio

    Fixed income investors may not be able to see them all right now, but important trends are stirring on the investment horizon.
  5. Savings

    How To Make Money With Airbnb: Risks & Rewards

    Airbnb lets you turn your home or spare room into extra cash. Here's how to make money and protect yourself from the risks.
  6. Mutual Funds & ETFs

    Consider This High-Yield ETF's Risks and Rewards

    Finding quality high-yield opportunities isn’t easy, but the YieldShares High Income ETF (YYY) has potential.
  7. Investing

    What are Fixed-Income Securities?

    For a fixed-income security, the periodic return on the investment is the same throughout the life of the security. Principal is returned at the time of maturity. The payment can be in the form ...
  8. Mutual Funds & ETFs

    Top Emerging Markets Dividend ETFs

    These dividend ETFs offer similar — yet different — ways to play emerging markets.
  9. Investing

    Reassessing Your Approach To Bond Investing

    Rethinking your fixed-income portfolio may not resonate in quite the same way as dropping 10 pounds or finally giving up that smoking habit.
  10. Personal Finance

    What Are Your Financial Resolutions For 2015?

    The end of a year evokes the inclination to look back, reflect, and resolve to make positive changes, like getting the finances on track once and for all.

You May Also Like

Hot Definitions
  1. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  2. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  3. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  4. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  5. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
  6. Fringe Benefits

    A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are ...
Trading Center