fund for repaying debts
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Sinking fund Definition from Language, Idioms & Slang Dictionaries & Glossaries
sinking fund
n : a fund accumulated regularly in a separate account and used to redeem debt securities
Noun
1. a fund accumulated regularly in a separate account and used to redeem debt securities
(hypernym) fund, monetary fund
Sinking fund Definition from Business & Finance Dictionaries & Glossaries
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 which is used to redeem debt securities or preferred stock issues.
Copyright © 2000, Campbell R. Harvey. All Rights Reserved.
Payments which retire a portion of a bond before maturity. Most often, a sinking fund redeems bonds in accordance with a fixed schedule, which is laid out at the time of issuance. See also Average Life, Term Bond and Super Sinker.
A reserve set aside for the future payment of taxes (generally applicable only in leveraged leases)- or for the purpose of payment of any liability anticipated to become due at a future date.
money set aside to meet future obligations. Now refers most to direct payment to creditors to reduce the debt principal.
Copyright © 2001, Ray WrightSinking fund Definition from Encyclopedia Dictionaries & Glossaries
A sinking fund is a fund established by a government agency or business for the purpose of reducing debt by repaying or purchasing outstanding loans and securities held against the entity. It helps keep the borrower liquid so it can repay the bondholder.
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