Analysis of Revenue Bonds

What this video covers

• Why revenue bonds require a feasibility study by an independent consulting engineer, and what makes the study favorable enough to support a strong credit rating
• How essentiality and exclusivity determine revenue quality, and why water or sewer bonds have more predictable cash flows than toll roads or convention centers
• The difference between parity bonds and subordinate lien bonds, and why the additional bonds test must be satisfied before new parity bonds can be issued
• The order of payment under a gross revenue pledge versus a net revenue pledge, and which party gets paid first in each structure
• Why utility revenue bonds typically carry a 1.25x debt service coverage ratio covenant when most other revenue bonds require 2.0x, and what that tells you about demand stability
• Where to find continuing disclosure data, official statements, and daily market prices using EMMA, credit rating agencies, and the Bond Buyer
• How bond insurance, letters of credit, and escrowed pre-refundings shift credit risk away from the issuer, and whose credit rating the investor actually holds