What Is a Revenue Bond?

A revenue bond is a type of municipal bond that is backed by the money generated by a particular project, such as a toll bridge, expressway, or local stadium. Revenue bonds, which are used to fund income-generating projects, are thus backed by a specific revenue source. Revenue bonds are often issued by any government agency or fund that is run like a company, such as those with both operating income and costs.
General obligation bonds (GO bonds) may be repaid with a number of tax sources, but revenue bonds, often known as municipal revenue bonds, cannot.