Investments glossary

Hospital Revenue Bond

A hospital revenue bond is a type of municipal bond intended to support the construction of new hospitals, nursing homes or related facilities. The bonds can also be used to purchase new equipment for these facilities or to finance upgrades for existing hospitals. The revenue created by the hospitals is then used to repay bondholders. Generally, bondholders receive payment only after paying the expenses of running the hospital is complete. This second-layer payment can create risk for bondholders if the hospital is not as profitable as anticipated.

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