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Industrial Development Bonds (IDB's) are tax-exempt securities issued up to $10 million by a government agency to provide money for the acquisition, construction, rehabilitation and equipping of manufacturing and processing facilities for private companies.
Who guarantees an Industrial Development Bond? Industrial Development Bonds are issued by municipal authorities, with the revenue source being the lease payments made by a corporate lessee.
Revenue bonds are a class of municipal bonds issued to fund public projects which then repay investors from the income created by that project. For instance, a toll road or utility can be financed with municipal bonds with creditors' interest and principal repaid from the tolls or fees collected.
Industrial Development Bonds are issued by municipal authorities, with the revenue source being the lease payments made by a corporate lessee. Furthermore, the corporate lessee unconditionally guarantees the bonds - so they take on the credit rating of the corporate guarantor.
A) Industrial revenue bonds. The industrial revenue bonds would have the highest risk because debt service is the responsibility of the corporation leasing the facility rather than the issuing municipality.
Revenue bonds issued by a municipality and secured by a lease agreement with a corporation. The purpose for the offering is to build a facility for a private company.
General obligation bonds are issued by states, cities or counties and not secured by any assets. Instead, general obligation are backed by the ?full faith and credit? of the issuer, which has the power to tax residents to pay bondholders.
Industrial revenue bonds (IRB) are municipal debt securities issued by a government agency on behalf of a private sector company and intended to build or acquire factories or other heavy equipment and tools. IRBs were formerly called Industrial Development Bonds (IDB).