sinking fund bonds

sinking fund bonds
sinking fund bonds ( sinkers)
Revenue bond issues that require the issuer to accumulate or set aside part of the annual revenue which is then used to redeem bonds before maturity, often well before regular call dates. The set-aside funds are called the sinking fund. The quantity of bonds subject to a sinking fund call is established in a sinking fund schedule. The specific bonds that are called each year are normally chosen for redemption by the drawing of random lots. Sinking fund calls are usually at or near par. American Banker Glossary

Financial and business terms. 2012.

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  • sinking fund — Cash set aside under restricted conditions as required by the terms of certain types of debt. See sinking fund bonds ( sinkers). American Banker Glossary A fund to which money is added on a regular basis that is used to ensure investor confidence …   Financial and business terms

  • sinking fund — see fund 1 Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. sinking fund …   Law dictionary

  • Sinking fund — Fund Fund, n. [OF. font, fond, nom. fonz, bottom, ground, F. fond bottom, foundation, fonds fund, fr. L. fundus bottom, ground, foundation, piece of land. See {Found} to establish.] 1. An aggregation or deposit of resources from which supplies… …   The Collaborative International Dictionary of English

  • sinking fund — n. a fund made up of sums of money set aside at intervals, usually invested at interest, in order to meet a specified future obligation, as the retirement of bonds at maturity …   English World dictionary

  • Sinking fund — Historical ContextA Sinking Fund was a device used in Great Britain in the 18th century to reduce national debt. While used by Robert Walpole in 1716 and effectively in the 1720s and early 1730s, it originated in the commercial tax syndicates of… …   Wikipedia

  • sinking fund — a fund to extinguish an indebtedness, usually a bond issue. [1715 25] * * * Fund set aside by a corporation or government agency for the purpose of periodically redeeming bonds, debentures, and preferred stocks. The fund is accumulated from… …   Universalium

  • sinking fund — Assets and their earnings earmarked for the retirement of bonds or other long term obligations. An obligation sometimes imposed pursuant to the issuance of debt securities or preferred shares by which the issuer is required each year to set aside …   Black's law dictionary

  • Sinking Fund Call — A provision allowing a bond issuer the opportunity to buy outstanding bonds from bondholders for a set rate, using money (a sinking fund) from the issuer s earnings saved specifically for security buybacks. Because it adds doubt for investors… …   Investment dictionary

  • Sinking Fund — A means of repaying funds that were borrowed through a bond issue. The issuer makes periodic payments to a trustee who retires part of the issue by purchasing the bonds in the open market. Rather than the issuer repaying the entire principal of a …   Investment dictionary

  • sinking fund — A holding by a borrower or the borrower s agent of the borrower s own bonds, purchased in the market or otherwise acquired to meet future redemption commitments. The reason may be a requirement of the loan agreement or it may be due to defeasance …   Accounting dictionary

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