water and sewer bond

Water and Sewer Bond

A municipal bond used to construct or expand a water and sewer lines for the municipality. The bond is secured by the revenue the utilities derive in the course of its operations; that is, the issuing municipality does not back the bond itself and the principal and interest are repaid from water bill collections. Generally speaking, a water and sewer bond (like all revenue bonds) is riskier than other municipal bonds because the water and sewer department has no power to tax. However, it is a fairly safe investment because most people will pay their water bills most of the time.

water and sewer bond

A revenue bond issued by a municipality to finance the building or extension of water and sewer systems. Interest and principal payments on the bond are derived from and are limited to revenues received from charges to the users of the systems.
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