Asked by Anthony Flesher on Apr 24, 2024
Verified
Sinking fund provisions often require the issuing company to call in and retire a percentage of the bond issue each year toward the end of a bond issue's life.
Sinking Fund Provisions
A requirement for a debtor to set aside funds at regular intervals to repay a bond or loan before its maturity in order to ensure the safety of the investment for creditors.
Bond Issue
The process by which a government or corporation raises funds by issuing bonds to investors, who lend them money in exchange for periodic interest payments and the return of principal at maturity.
- Familiarize oneself with the critical elements and characteristics of bonds, including terms for redemption before maturity, convertible properties, and interest rate details.
- Understand the implications of bond covenants and financial obligations for issuers and investors.
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Learning Objectives
- Familiarize oneself with the critical elements and characteristics of bonds, including terms for redemption before maturity, convertible properties, and interest rate details.
- Understand the implications of bond covenants and financial obligations for issuers and investors.
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