South Florida Arbitration & Litigation Lawyer Blog
Taxable Municipal Bond – South Florida Bond Investment Fraud, Mismanagement and Misrepresentation, FINRA Arbitration and Litigation Attorney:
A taxable municipal bond is a taxable debt obligation of a state or local governmental entity. Taxable municipal bond are issued as private purpose bonds to finance such projects as a sports stadium, as municipal revenue bonds where caps apply or as public purpose bonds where the 10% private use limitation has been exceeded.
A municipal revenue bond is a bond that is issued to finance various types of public work projects like bridges, tunnels or sewer systems and with payments to the bondholders coming directly from the revenues of the project. For example, if a municipal revenue bond is issued to build a bridge, the tolls collected from the motorists using the bridge are committed for paying of the bond. As with all bond issues, it is important to read the indenture establishing the bond for holders of municipal revenue bonds hove no claims on the issuer’s other income or assets unless stated otherwise in the indenture. Consequently, the risk associated with these types of bonds rise and fall with the economic viability of the project.
Please keep in mind that the above referenced information is being provided for educational purposes only. Thus, it is not designed to be complete in all material respects. It should not be relied upon for legal or investment advice. If the reader has any questions concerning the contents of this post, you should contact a qualified professional.
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