Construction bonds are securities that are issued by government agencies to fund projects that benefit the country and that are backed by a fixed amount of government money.
It is typically a form of long-term debt that requires an agreement between the company issuing the bond and the government.
If the bonds go bust, the government can step in to cover the shortfall.
The cost of a construction bond can be as low as 5 percent of the value of the construction projects that are funded by the bond.
Construction bonds have long been used as a hedge against rising interest rates.
For example, the Federal Reserve raised interest rates last year, causing construction bonds to fall in value.