Revenue Bonds are secured by:

• A. The revenue generated by a state or municipal project
• B. The taxing power of the jurisdiction
• C. The issuer's credit rating
• D. A guarantee by the federal government

Answer: (A)

Revenue bonds are secured by the income produced by a specific project financed with the bond proceeds. The debt service comes from the project’s revenues—such as tolls, user fees, or charges—rather than from the issuer’s tax collections or general assets. This means the security rests on the project’s cash flow, not on the jurisdiction’s taxing power or the issuer’s overall credit. There’s typically no federal government guarantee unless a special program provides one. For example, a sewer system or toll road funded by revenue bonds is repaid from the fees those facilities collect, not from taxes.