Utility Revenue Bond

DEFINITION of 'Utility Revenue Bond'

A type of municipal bond that is issued to finance utility projects, such as electrical plants, water systems, sewer systems or any other type of public utility. A utility revenue bond is repaid from monies earned through the utility improvements, once the project has been completed and the utility is operating.


BREAKING DOWN 'Utility Revenue Bond'

A bond is an interest-bearing or discounted debt security that is issued by a government or corporation in order to raise funds for capital projects. Generally, utility revenue bonds have one year's worth of debt service in what is called a reserve fund, to protect bondholders in the event that the project is not completed on time (and is not earning revenue) or where revenues are otherwise less than anticipated.


Trading Center