Self-supporting debt

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Self-supporting debt

Bonds sold to finance a project that will produce enough revenue through tolls or other charges to retire the debt . See: revenue bond.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Self-Supporting Debt

A bond, especially a municipal bond, where the coupons and principal are paid with funding from the project the debt seeks to finance. It may be used, for example, to build a hospital or a toll bridge, and bondholders are repaid with the revenue the hospital or toll bridge derives. Self-supporting debt is usually slightly higher risk than a general obligation bond because if the project fails to generate revenue, the bond will default. However, self-supporting debt is generally low risk and highly liquid.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved