Airport Revenue Bond:
A type of municipal bond issued by an airport authority or municipality to finance the construction, expansion, or improvement of airport facilities. These bonds are backed by the revenue generated by the airport, such as landing fees, terminal rentals, concessions, and other sources of income. The bondholders receive periodic interest payments and the principal amount is repaid upon maturity. Airport revenue bonds are considered relatively safe investments due to the steady cash flow generated by airports, making them attractive to investors seeking stable returns.
Airport revenue bonds are a type of municipal bond issued by airport authorities to finance the construction, expansion, or improvement of airport facilities. These bonds are backed by the revenue generated by the airport, such as landing fees, terminal rentals, and concession sales, rather than the full faith and credit of the issuing municipality. The bondholders are repaid from the airport’s operating income and are not guaranteed by the government. Airport revenue bonds are typically tax-exempt and may offer investors a higher yield than other types of municipal bonds due to the specific revenue stream backing them.
Q: What is an Airport Revenue Bond?
A: An Airport Revenue Bond is a type of municipal bond issued by an airport authority to finance the construction, expansion, or improvement of airport facilities. The bond is backed by the revenue generated by the airport, such as landing fees, terminal rentals, and concessions.
Q: Who issues Airport Revenue Bonds?
A: Airport Revenue Bonds are typically issued by airport authorities or municipal governments that oversee the operation and development of airports.
Q: How are Airport Revenue Bonds repaid?
A: Airport Revenue Bonds are repaid through the revenue generated by the airport. This revenue includes fees paid by airlines for landing and takeoff, rental fees from terminal facilities, parking fees, and revenue from concessions such as shops and restaurants.
Q: Are Airport Revenue Bonds backed by the government?
A: Airport Revenue Bonds are not typically backed by the government. They are considered revenue bonds, meaning they are secured by the revenue generated by the airport itself, rather than the full faith and credit of the government.
Q: What is the purpose of issuing Airport Revenue Bonds?
A: The purpose of issuing Airport Revenue Bonds is to raise funds for the construction, expansion, or improvement of airport facilities. These projects may include building new runways, expanding terminals, upgrading security systems, or improving infrastructure to accommodate increased passenger traffic.
Q: How are Airport Revenue Bonds rated?
A: Airport Revenue Bonds are rated by credit rating agencies based on the financial strength of the airport, its revenue-generating capacity, and the overall economic conditions of the region. Higher ratings indicate lower credit risk and may result in lower interest rates for bondholders.
Q: Can individuals invest in Airport Revenue Bonds?
A: Yes, individuals can invest in Airport Revenue Bonds. They are typically sold to institutional investors, such as mutual funds, insurance companies, and pension funds, but individual investors can also purchase them through brokers or financial institutions.
Q: What are the risks associated with investing in Airport Revenue Bonds?
A: Like any investment, Airport Revenue Bonds carry certain risks. The main risks include changes in the airline industry, economic downturns affecting passenger traffic, and potential default by the airport authority. It is important for investors to carefully evaluate the creditworthiness of the issuing airport authority before investing.
Q: How can I determine the creditworthiness of an airport authority issuing Airport Revenue Bonds?
A: Investors can assess the creditworthiness of an airport authority by reviewing its financial statements, revenue sources, passenger traffic trends,
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 29th March 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/airport-revenue-bond/
- Modern Language Association (MLA):Airport Revenue Bond. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/airport-revenue-bond/.
- Chicago Manual of Style (CMS):Airport Revenue Bond. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/airport-revenue-bond/ (accessed: May 09 2024).
- American Psychological Association (APA):Airport Revenue Bond. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/airport-revenue-bond/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts