What is a net revenue pledge?
A net revenue pledge requires the issuer of a municipal bond to use generated revenues to service debt costs (interest and principal payments) immediately after satisfying maintenance and operational expenses.
What is pledged revenue coverage?
Gross revenue pledge, also known as “pledged revenue”, is a stipulation in a municipal bond indenture that compels the issuer to use the bond’s revenue to service the debt first. Gross revenue pledge, or lack thereof, is a factor in the rating of a debt obligation by a credit agency and in the pricing of the issue.
What is the difference between a GO pledge and a revenue pledge?
An Unlimited Tax GO or UTGO is a type of general obligation bond in which the taxing authority pledged to repay debt is not limited as to rate or amount. Gross revenue pledge — A pledge that all revenues received will be applied to pay debt service prior to payment of any expenses.
What is a PHA bond?
Housing authority bonds, or housing bonds, are issued by a state or local government agency to help finance the construction or rehabilitation of affordable rental housing. Under certain programs, the proceeds from such bonds also may be used to help low-income people purchase homes.
Which of the following actions must be taken if a municipality wishes to raise its debt limit?
If a municipality wishes to raise its debt limit, the voters must approve via a public referendum. In effect, the voters are approving an increase in their taxes when they approve such a measure.
What is an additional bonds test?
It is a financial statement that a company must issue before making a new issue of a bond. The additional bonds test shows what assets the potential issuer has available to pay coupons on the bond. It helps ensure the issuer is able to service debt on the new issue.
Are PHA bonds safe?
Because PHAs are backed by the issuer and the U.S. government, they’re considered among the safest municipal bonds.
Which security does not earn interest?
Short-term fixed-income securities include Treasury bills. The T-bill matures within one year from issuance and doesn’t pay interest. Instead, investors can buy the security at a lower price than its face value, or a discount. When the bill matures, investors are paid the face value amount.
Which of the following sources of revenue would not be available to pay interest on a revenue bond issue?
Which of the following sources of revenue would NOT be available to pay interest on a revenue bond issue? Ad valorem (property) taxes secure a general obligation bond, not a revenue bond. Special taxes, fees, lease payments, and capitalized interest may be used to pay interest on a revenue bond.
What is maximum annual debt service?
Maximum Annual Debt Service means the maximum amount of Debt Service due on System Obligations in a Fiscal Year during the period commencing with the Fiscal Year for which such calculation is made and within the next five years in which Debt Service for any System Obligations will become due.
What is self supporting debt?
self-supporting debt. bonds sold for a project that will produce sufficient revenues to retire the debt. Such debt is usually issued by municipalities building a public structure (for example, a bridge or tunnel) that will be producing revenue through tolls or other charges.
How is net profit related to operating cash flow?
(which is equal to operating cash flow minus capital expenditures). Once cash flow is determined, the next step is dividing it by the net profit. That is the profit after interest, tax, and amortization.
When to recognize revenue from a pledged receivable?
Accounting rules allow an organization to recognize revenue from a pledged receivable, also known as a promise to give, on the date of the commitment, if it is unconditional. Understandably the development team would like to have as many donor commitments as possible qualify as a promise to give.
Can a conditional pledge be recorded as revenue?
Intentions to give are considered conditional and cannot be recorded as revenue. In order to recognize contribution revenue, a pledge must be unconditional. A conditional pledge occurs when a donor promises to contribute to an organization only if future and uncertain conditions are met.
How is free cash flow calculated for a company?
Free Cash Flow (FCF) Free Cash Flow (FCF) measures a company’s ability to produce what investors care most about: cash that’s available be distributed in a discretionary way. (which is equal to operating cash flow minus capital expenditures). Once cash flow is determined, the next step is dividing it by the net profit.
