Quick Finance Tip – Revenue Bonds

​Revenue Bonds are issued for specific project financing. Typically, they are often compared with General Obligation (GO) Bonds, and have more risk than GOs, because they are dependent on a sole source of revenue. A key credit metric for revenue-backed municipal bonds to note is the debt service to cover ratio. This measures how much revenue is available to cover debt payments, after considering the operating expenses. Rule of thumb, the higher the ratio the stronger the creditworthiness.