Net Revenue Pledge

Net Revenue Pledge

A provision in some municipal bonds requiring the issuer to use the revenue the bond raises after expenses to pay for the debt service. For example, if a bond issue raises $10 million, but the project it intends to finance only costs $8 million, a net revenue pledge would require the issuer to use the remaining $2 million to service the debt from the bond. A net revenue pledge exists in order to make the municipal bond less risky for investors; a bond indenture that contains a net revenue pledge is more likely receive a higher credit rating than one that does not have one.
References in periodicals archive ?
Bonds are secured by a net revenue pledge of the entire nine canyon wind project, which consists of three phases.
A first-lien net revenue pledge on the city's sanitary sewer system secures the bonds.
For instance, a system with a net revenue pledge of 1.1 times, covenants that net system revenues will be sufficient (during every year in which bonds are outstanding) to cover O&M expenses with a multiple of $1.10 of net revenues available for every $1.00 of debt service due.
The bonds are secured by a net revenue pledge and certain funds under the bond indenture.
The bonds are payable from a senior lien net revenue pledge of the city's sewerage system (the system).
The bonds are primarily secured by a net revenue pledge, and PFCs are used to offset debt service.
The bonds are primarily secured by a net revenue pledge, and the PFCs are used to offset debt service.
LIMITED REVENUE PLEDGE: UF's net revenue pledge excludes the TAF revenues, which generates about 47% of the system's total annual receipts in fiscal 2017.
The bonds are secured by a net revenue pledge of the district's wastewater utility system (the system).
The bonds are secured by a net revenue pledge, after payment of operating and maintenance expenses, of the wholesale electric system.
REVENUE PLEDGE SUPPORTS RATING: The 'AA' rating is supported by the strength of the net revenue pledge of the sewerage system and does not rely on the strength of the city's annual appropriation pledge.
The consolidated system revenue/refunding bonds are secured by a net revenue pledge of the consolidated systems, which includes the electric distribution, water, wastewater and fiber optics systems, and the Lake Chelan hydroelectric project.