Net Revenue Pledge

Definition - What does Net Revenue Pledge mean?

Net Revenue Pledge is a pledge from a revenue bond that pays maintenance and operation expenses first, then debt service.

Testopedia explains Net Revenue Pledge

When a revenue producing facility is financed through the sale of revenue bonds the issuer must state the order in which the expenses of the facility will the paid. It a net revenue pledge the issuer pays the expenses related to operating and maintaining the facility first. Once those expenses are paid the next expense to be paid will be the debt service, the interest and principal payments. This is the preferred by the bond holders as it is better to have the facility maintenance to be paid first to ensure that it remains in good shape.

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