Sinking fund requirement

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.

Sinking Fund Provision

A provision in some bond indentures requiring the issuer to put money aside to repay bondholders at maturity. In bonds with such a provision, a fund or account is set up into which an issuer deposits money on a regular basis to repay the bond when it matures. See also: Sinking Fund Bond.
References in periodicals archive ?
In our example, the issuer could deliver the $25 million to the trustee with instructions to satisfy some future sinking fund requirement.
I control for differences in bond ratings, call options, sinking fund requirements, insurance, and years-to-maturity across bond issues.
Judge Lifland rejected this argument, pointing out that maturity dates, interest rates and sinking fund requirements were all changed with the new debt.
Maturities and sinking fund requirements on long-term debt are as follows: