Revenue bonds are issued primarily for what purpose?

Revenue bonds are issued primarily to finance specific projects that are expected to generate revenue, which will be used to repay the bondholders. These types of bonds are secured by the revenues derived from the project they finance, such as tolls from a toll road, fees from a public utility, or rental income from a facility. The focus on project-specific financing means that the issuer does not rely on general taxation or other sources of revenue.

This is in contrast to general obligation bonds, which are backed by the full faith and credit of the issuing entity and typically fund broader governmental operations or public services. Revenue bonds are particularly attractive for financing infrastructure projects where the expected income from the project can be used to service the debt, thereby reducing the risk to taxpayers and the general fund.