Revenue Bonds pay interest and principal only from a dedicated revenue stream generated from a project or a facility such as a toll road or a water and power system. When the revenue stream generated from these projects is not sufficient to maintain debt-service coverage the issuer of the bonds will default on payment. There are no other sources of income to cover this shortfall.
There are many types of revenue bonds. The following are some of the projects
financed by issuance of municipal bonds: