What is considered self-supporting debt?

Self-supporting debt refers to obligations that generate sufficient revenue to cover their own debt service, meaning the income generated from the project financed by the debt can be used to make interest and principal payments. This concept is often found in the context of municipal finance, where various types of bonds are issued.

In the context of self-supporting debt, the option indicating that the debt is directly issued by an entity without overlap is correct. This means that the entity has full responsibility for the debt, and any income produced by the projects financed by the debt is directly available to service those obligations. In many cases, this leads to a lower risk of default since the cash flows are more predictable and contained within the project or entity, allowing for adequate coverage of debt obligations.

The other choices do not accurately describe self-supporting debt. For example, debt issued by overlapping entities might create complexities in the repayment structure, and retired debt is no longer an obligation. Additionally, debt with no repayment plan would suggest a lack of structure and predictability in repaying the obligations, which does not align with the principles of self-supporting debt. Thus, the correct understanding is that self-supporting debt is characterized by its direct issuance and the entity's ability to service it from