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Public Power Bond
(redirected from Public Power Bonds)

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Public Power Bond
A bond issued by a publicly-owned utility company. Because utility companies have very large capital expenditures (they must build expensive infrastructure to provide their services), they use public power bonds to finance many of their projects. Because they are publicly-owned, interest is usually tax exempt at the federal level.

public power bond
Debt that is issued by a public power agency such as the Municipal Electric Authority of Georgia. Interest on such a bond is usually tax-exempt federally. Interest and principal payments are derived from revenues generated by the sale of electricity.


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The fund was well diversified in terms of sectors, with the largest concentrations in health care (25%), general obligations (22%), essential-service public power bonds (14%), and housing bonds (12%).
PUBLIC POWER BONDS - KEY CREDIT POINTS: Public power utility bonds in most cases are unsecured debt obligations supported solely by a pledge of net revenues generated by the utility, including other legal structural protections, such as rate covenants, and debt service reserve fund requirements.
The fund was well diversified in terms of sectors, with the largest concentration in general obligations (20 percent), health care (25 percent), and essential service public power bonds (11 percent).
 
 
 
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