Definition of "Double-Barreled Bond"

A municipal revenue bond that has two separate entities making a financial commitment. The project's revenues provide the initial security and the secondary guarantee is provided by the general obligation taxing powers of the issuer. To illustrate, a revenue bond would be double-barreled if a highway authority issues a bond that is secured by toll revenues and if the state also secures the bonds. Thus, if highway usage is low and toll revenues are insufficient to cover principal and interest payments, investors are safeguarded against default because of the state's guarantee.