Gross Revenue Pledge

Gross Revenue Pledge

A provision in the indentures of some municipal bonds stating that the first priority of the revenue from the bond shall service debt or be set aside to pay the coupons to bondholders. The project a bond intends to finance is relegated to second place, and may be funded from other sources in addition to the bond. This places a difficulty on the issuer, but reduces the risk of default to bondholders. It also allows the bond to be issued at a lower interest rate, which is good for the issuer.
References in periodicals archive ?
The bonds are secured by a gross revenue pledge of the obligated group (OG), consisting of BRRH Corporation, the parent of BRRH, and the hospital, and a mortgage on certain OG properties.
The bonds are secured by a mortgage on Carpenter's land and buildings, gross revenue pledge, and debt service reserve fund.