Debt ceiling

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Related to Debt Caps: Debt capital

Debt ceiling

Debt Ceiling

The maximum amount that a government can borrow. The term especially applies to municipalities; rising above the debt ceiling may trigger a reduction it a municipality's credit rating. Cities and other local governments that are near the debt limit may issue participation certificates--a right to the receivables for a certain project--instead of direct debt. The United States also has a national debt ceiling, but Congress simply raises it every time the national debt approaches the ceiling.
References in periodicals archive ?
"We have adopted an approach of a salary cap, being used in conjunction with a debt cap and draft picks in order to even the competition and to prevent one owner's spending harming the integrity of the competition," he explained.
The IMF, he said, sees the national dialogue as an opportunity to get all sides to agree on IMF recommendations for fiscal reforms, debt caps, and government spending cuts.
Undoubtedly the most frequent question that members ask is, "How do I know if my debt is too high?" Indicators from rating agencies and other sources will provide some reasonable guidelines-debt burden is considered high when debt service payments represent 15-20 percent of the combined operating and debt service fund expenditures [1]--and some fairly useless ones--debt burden is considered too high if direct net debt exceeds 90 percent of the amount authorized by state law [2] (state authorized debt caps generally only apply to tax-backed bonds, and as such, can easily be circumvented with other debt instruments).