As a former corporate bond origination executive at NAB in London, Mike Baird, the NSW Treasurer, has gone to some lengths to have bonds feature in the financing of government initiatives. And he has certainly made more effort than any other treasurer, state or federal.He announced the introduction of social benefit bonds (SBBs) in September 2011. This initiative has since seen two other SBB offers being made.Last year, Baird appointed Macquarie Capital to investigate the viability of monetising part of the NSW lottery revenue duties received by the state. The lotteries business was sold to the Tatts Group in 2010, but the state receives annual duties that are expected to amount to A$321 million in fiscal year 2012 and should increase to around $355 million in 2015-16. Monetisation is effectively a securitisation of these revenues.Last week, Baird said he intended to use bonds to finance most of the construction of the A$10 billion WestConnex toll road. The bonds will not be guaranteed by the NSW government.The bonds will be sold to those ideal holders of long term assets: foreign pension funds and local superannuation funds.Unlike recent infrastructure projects that have resulted in horrendous losses for infrastructure investors - the Lane Cove, Cross City and Clem Jones tunnels, and EastLink - bond investors will not be asked to take on patronage risk.In fact, the NSW government will invest A$1.8 billion over the next four years to build the first stage of the toll road. Then it will use the tolls generated on the first stage to cover the cost of bonds issued to build the next stage, and so on.The bonds will be issued by a state-owned toll road company in which investors may eventually get the chance to buy equity, but the bonds will not be guaranteed by the NSW government, so the coupon will need to be set accordingly.Typically, bonds issued by long-term infrastructure companies are not highly rated. Think of issuers like energy transmission and distribution utilities, ports and other toll roads.The credit ratings are investment grade but sit within the triple B to low single A range. Add to this the long terms to maturity that the bonds will have, and the coupons the bonds will have to pay should be quite attractive to many investors.But investor interest may be polarised.Pension and superannuation funds are obvious investors in these sorts of bonds but other institutional investors may be put off by the long terms to maturity and the inherent illiquidity that results in the wholesale market. Given the size of the funding task involved, consideration should perhaps be given to selling ASX-listed bonds to retail investors.