Hospital Revenue Bond

Organizations and governments can use lots of different types of revenue streams to back bond issuances. Toll revenue. Home Mortgages. Royalties for David Bowie songs. And, pertinent for this definition, hospital revenue.

You want to build a hospital in your hometown. You plan to finance construction through a bond sale. To entice investors you need to let them know where the future cash will come to pay them back, with interest.

To that end, you pledge future revenues from the hospital being built as a backing for the bonds. It may seem like you're rooting for people to get sick. But hey, your town has a lot of smokers and a love for fried chicken and ice cream. Betting on eventual hospital revenue is...nearly a sure thing.