How are Revenue Bonds typically repaid?

Revenue bonds are typically repaid through customer billings. Unlike general obligation bonds, which are secured by the taxing power of the issuing authority and repaid through taxes, revenue bonds are tied to specific revenue-generating projects. The revenue generated from these projects, such as utilities or toll roads, is primarily used to meet the interest and principal payments on the bond.

This arrangement means that the financial health of the project directly affects its ability to repay the bonds, making it essential to establish and maintain a reliable source of revenue that can cover the bond payments. Other funding sources, like property taxes, general fund appropriations, or state grants, are not directly involved in the repayment of revenue bonds, as these bonds are specifically designed to be self-sustaining through the revenues they generate.