ShmoopTube

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finance a la shmoop what is an airport revenue bond, well it's just uh [A muni bond on the table]

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muni bond people don't get all uptight let's go through security here alright

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well there are many flavors of muni bonds and airport is a popular one all [Different flavors of muni bonds]

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right you know what a muni bond is generally safe, backed by the local

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government but you know sometimes people get nervous about them because well

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frankly a lot of municipalities are going bankrupt particularly California

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Stockton, San Bernardino even Orange counties in trouble so investors like

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the safety of muni bonds with revenue attached and hence we have the airport [Airplane takes off from airport]

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muni bond backed by revenues from the airport and the you know clever name

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Well in this country a whole lot of airports were

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initially built by the military so those were federal dollars put to work but

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once the runway was in and there was access for parts and fuel while the

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military generally lost interest oh and the effect that wars went away kinda [Tanks waiting]

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helped so they didn't really need the fancy bathrooms with the

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mother-of-pearl tile and sink knobs you know military people well they can use a [Military man peeing in the bushes]

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tree or a bush most of the time they're tough so lots and lots of upgrades have

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been needed for airports over the last decades especially with the advent and

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popularity of private aviation...Airports issue muni bonds backed by their ability

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to collect things like landing fees overnight motel airplane parking fees

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premiums placed on jet fuel and a bunch of other revenue sources that small

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airports lean on to pay for the upgrades they've installed. Sometimes the city [People walking through airport terminal]

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issues the bond and the city owns the airport and at other times it's just the

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airport itself but done as a muni bond so that the airport gets a really low

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interest rates from the locals so yeah that's an airport revenue bond and it's [Man holding airport revenue bond on a plane]

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a you know muni in the bank...

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