Although the issuer repays the bond, it is simply passing along money collected from the company that is the true beneficiary of the bond. The public entity has absolutely no financial responsibility for the loan, nor does the IRB decrease its bond rating. The issuer agrees only to pay the bondholders what the company pays them. In case of default, the company's credit suffers, though the issuer might get an embarrassing shiner. Indeed, a company cannot seek an IRB without lining up the financing first, as demonstrated by a commitment of credit from a bank, from investors, or even from its own internal resources.
Many companies buy their own bonds back, just to gain the tax savings.
In that case, it's not just a financing arrangement, but a smart way to lower costs. After receiving approval by the City Council for an IRB, the company transfers title of the assets to be acquired or otherwise covered by the bond to the city. The city then leases the equipment or property back to the company and the city pays back the bond with the rent money. That's a sweet deal for bond investors and it effectively lowers the interest rate the expanding company must pay for the financing. To find out, the city conducts a financial impact analysis of foregone revenues-gross receipts and property taxes not collected.