Self-supporting debt

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.

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.
References in periodicals archive ?
Self-supporting debt from the electric, water, and wastewater utilities continue to absorb a sizeable amount of the city's tax-supported debt, thereby substantially reducing the impact on the resource base.
self-supporting debt bonds at a value of USD 400 million for the benefit of
debt principal maturing each year, net of self-supporting debt (i.e.
Net direct debt (sometimes called net bonded debt) excludes sinking fund accumulations and self-supporting debt. For the county, GFOA calculated net direct debt as the sum of all general obligation bonds and notes outstanding, less the year-end balance of the debt service fund.
Direct debt, including the current issuance and net of self-supporting debt, comprises about 36% of liabilities.
When practical, the city will develop, authorize, and issue revenue, special fee, or other self-supporting debt instruments instead of general obligation bonds.
The town's long-term liability burden is approximately 6% of personal income including the current issuance and excluding self-supporting debt from this issuance and outstanding debt.
When self-supporting debt is excluded, Washington County is closer to the average ratios for the Maryland peer group (see Exhibit 4, for example).
Specifically, the refinement involves the netting out of substantial self-supporting debt for the district's largest overlapping debt issuer - the City of Lubbock.
Overall net debt excludes self-supporting debt that is unlikely to be paid from the tax base itself because it has its own revenue stream (i.e., from water and sewer fees or other self-supporting enterprise earnings).
Risks around the expected growth of self-supporting debt could pose potential rating pressure, in the event that capital projects require general government support.