sinking fund
See bond sinking fund.
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sinking fund
fund set aside for periodic payments, aimed at reducing or amortizing a financial obligation. A bond with a sinking fund provision is an example.
Sinking Fund
Related Category: Economics: Terms and Concepts
sum set apart periodically from the income of a government or a business and allowed to accumulate in order ultimately to pay off a debt.
sinking fund
Some corporate bonds and most preferred stock have sinking fund provisions. These require the issuer to set aside funds and retire a specified amount of the outstanding securities each year. Securities can be retired in two ways: ...
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Freefall: Free Markets and the Sinking of the Global Economy
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A sinking fund is a special account that finances the compulsory early repayment by a borrower of a certain amount of a bond issue, usually at par value, regardless of the current value of the bonds in the secondary market.
DEBT SINKING FUND - See sinking fund.
DEBT SWAP - A set of transactions in which a firm buys a country's dollar bank debt at a discount and s...
DEBT TO EQUITY - measures the risk of the firm's capital structure in terms of amounts of capital contr...
Sinking Fund: A method whereby a company purchases a given percentage of its bonds or shares as per agreement in the trust indenture or prospectus.
Sinking fund provision:
A means of repaying funds advanced through a bond issue. The issuer makes periodic payments to the trustee, who retires part of the issue by purchasing the bonds in the open market.
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Sinking fund requirement
A condition included in some corporate bond indentures that requires the issuer to
retire a specified portion of debt each year. Any principal due at maturity is called the balloon maturity.
Bill of materials ...
Sinking Fund - Monies paid periodically by the issuer to a fund established to call or retire term bonds over the life of an issue.
Sinking Fund: Indentures on corporate issues often require that the issuer make annual payments to a sinking fund, the proceeds of which are used to retire randomly selected bonds in the issue.
Sinking fund. Money regularly set aside by a company to redeem its bonds, debentures or preferred stock from time to time as specified in the indenture or charter.
Sinking Fund:
A sum of money usually set aside at regular intervals which will earn compound interest, ultimately sufficient to meet a known future capital commitment or loan repayment.
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.
Sinking Funds
A fund set up by a company to retire, over a period of time, the major part of a preferred share issue, or a debt issue prior to maturity.
Sinking fund - Refers to an account that was set up in order to reduce another account over time to zero (using the principles of straight-line depreciation or amortisation).
Sinking fund
A fund to which money is added on a regular basis that is used to ensure investor confidence that promised payments will be made and that is used to redeem debt securities or preferred stock issues.
Sinking fund requirement ...
Sinking fund
Money set aside by an issuer of bonds on a regular basis, for the specific purpose of redeeming debt.
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Sinking fund
To ensure there's money on hand to redeem a bond or preferred stock issue, a corporation may establish a separate custodial account, called a sinking fund, to which it adds money on a regular basis.
SINKING FUND: Money regularly set aside in a custodial account by a company to redeem its bonds, debentures or preferred stock.
Sinking Fund Schedule
A schedule of payments required under the original revenue bond resolutions to be placed each year into a special fund, called the sinking fund, ...
Sinking fund. Financial reserves set aside to be used exclusively to redeem a bond or preferred stock issue and thus reassure investors that the company will be able to meet that obligation.
Sinking Fund A requirement specified in a bond indenture that obligates the firm to annually retire a specified portion of the debt.
Sinking Fund - Provision by an issuer of bonds to set aside money for later use in redeeming or retiring the principal of the bonds issued and outstanding, either at maturity or at another date specified in the bond.
Sinking Fund: A regular debt payment is set aside in anticipation of a future payment.
Solvency: The state of being able to pay debts as they become due.
Bond Sinking Fund. Amounts accumulated and segregated for the purpose of redeeming or retiring bonds. Can also apply to preferred stock.
Book Value of an Asset. The asset's cost less accumulated depreciation.
Sinking fund
A sinker is a fund created by a provision in many bond contracts that requires the issuer to set aside each year a portion of the final maturity payment so that investors can be certain that the funds will be available at maturity.
Sinking fund bonds and serial bonds are not classes of bonds, just methods of retiring them that are adaptable to debentures, convertibles, and so on. See also Refunding.
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sinking fund bond
A bond issue that requires periodic setting aside of monies into a separate fund to provide for eventual repayment of the debt at maturity ...
Sinking fund amortization is a method of allocating costs in which amortization expense is lowest in an asset’s early years but increases over time.
Sinking Fund
A type of savings fund in which deposits are made regularly to be used later for a specific purpose, such as purchasing equipment or buildings.
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.
A sinking fund provision that may allow repurchase of twice the required number of bonds at the sinking fund call price.
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Personal Finance Glossary ...
Resembles a sinking fund except that money is used only to purchase bonds if they are selling
below their par value.
Purchase method ...
Doubling option
A sinking fund provision that may allow repurchase of twice the required number of bonds at the sinking fund call price.
Dow dividend theory
See: Dogs of the Dow.
Interest Impact on Sinking Fund Factor - Is calculated by the following formula: ...
A tranche class offered by some CMOs that has a sinking fund schedule and an ability to make principal payments that are not subordinated to other classes. Pacific Stock Exchange Used for listed equity securities.
[ITDS] The payment of the principal amount of an issue by a series of periodic payments either directly to bondholders or to a sinking fund and thence to bondholders.
See: Sinking fund. Debt securities IOUs created through loan-type transactions-commercial paper, bank CDs, bills, bonds, and other instruments. Debt service Interest payment plus repayments of principal to creditors (retirement of debt).
Targeted Amortization Class (TAC) bonds Bonds offered as a tranche class of some CMOs, according to a sinking fund schedule.
bond class that stipulates cash-flow contributions to a sinking fund. With the P.A.C.
sinker A bond whose interest and principal payments are made via a sinking fund. sinking fund A type of fund, where a firm sets aside money over time, in order to retire...
Mandatory redemption schedule Schedule according to which sinking fund payments must be made. Manufactured housing securities (MHSs) Loans on manufactured homes - that is, factory-built or prefabricated housing, including mobile homes.
A sinking fund bond obligates the issuer to set aside some of its earnings to retire bonds periodically. A bond is usually identified by its maturity date and its coupon rate, which is the interest rate stated on the bond.
carries the most stable cash flows and the
lowest prepayement risk of any class of CMO. Because of that stable cash flow, it is considered the least risky CMO.
2) A CMO bond class that stipulates cash-flow contributions to a sinking fund.
There are two methods used to retire debt--sinking fund and serial. Sinking fund and serial bonds are not types of bonds, just methods of retiring them.
maturity, sinking fund redemption, etc.). The average life, also referred to as the 'weighted average life' or 'weighted average maturity,' is a reflection of the rapidity with which the principal of an issue is expected to be paid.
Insurance policy method is a slight modification of the depreciation fund method or sinking fund method.
Schedule according to which sinking fund payments must be made.
Manufactured housing securities (MHSs)
Loans on manufactured homes - that is, factory-built or prefabricated housing, including mobile homes.
Schedule according to which bond sinking fund payments must be made.
Manipulation
Dealing in a security to create a false appearance of active trading, in order to bring in more traders. Illegal.
Bonds offered as a tranche class of some CMOs, according to a sinking fund schedule. They differ from PAC bonds whose amortization is guaranteed as long as prepayments on the underlying mortgages do not exceed certain limits.
Debt Retirement definition :
The complete repayment of debt. See: Sinking fund.
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Purchase fund
Definition: [crh] Resembles a sinking fund, except that money is used to purchase bonds only if they Definition: are selling below their par value.
Any principal due at maturity for a bond with a sinking fund requirement.
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Balloon Maturity definition :
Any large principal payment due at maturity for a bond or loan with or without a sinking fund requirement.
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Beckwith uses this formula in relation to a sinking fund but notes (p.124) that the formula is identical for an amortization process.
AVERAGE LIFE " The average length of time that a bond issue with a mandatory sinking fund is expected to be outstanding.
The yield to worst is calculated by making worst-case scenario assumptions on the issue by calculating the returns that would be received if provisions, including prepayment, call or sinking fund, are used by the issuer.
Debt Service
Cash required by a corporation or municipality to cover all interest and principal payments due in a given year, including sinking fund payments.
 See also: Banks, Expense, Values, Prepayment, Indenture
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