Private Activity Bonds

Private Activity Bonds (PABs) are a type of municipal bond issued by or on behalf of local governments to raise funds for projects that benefit private entities or organizations. These bonds help finance things like airports, bridges, or hospitals used by private companies, but they often qualify for lower interest rates and tax advantages. Essentially, they allow private projects to access affordable financing through the municipal bond market, with the understanding that the project will generate revenue or economic benefits that support repayment.