airport revenue bond

Definition

A tax-exempt bond issued by a city, state, country, or airport authority, which is guaranteed based on general revenues of the airport or leasing payments made by an airline to rent a facility. These types of bonds are issued when the airport is seeking money to fund an expansion or help maintain current operations. Payment for airport revenue bonds may also be contingent on the well-being of privately held companies. This type of backing poses a risk for investors because if the company runs into financial hardships, the investors may not be able to recoup funds invested.
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