Debt limitation

Debt limitation

A bond covenant that restricts the firm's ability to incur additional indebtedness in some way.

Debt Limitation

A negative covenant in a bond indenture limiting the issuer's ability to acquire more debt before the bond matures. Debt limitation may take a variety of forms. For example, the indenture may restrict the debt service coverage ratio, meaning that the company can acquire theoretically unlimited debt provided it increases it income to such a level that it can service the debt. On the other hand, debt limitation may set a maximum dollar amount of debt that the issuer may acquire during the life of the bond, or even may prevent the issuer from becoming any more indebted at all. These latter debt limitations are more likely when the issuer is not on sound financial footing and possibly is issuing junk bonds. A debt limitation should not be confused with a debt limit, which is similar but is a legal requirement on a government.
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And the answer to why the cap on public debt was not maintained, despite the limitation set in the Fiscal Responsibility and Debt Limitation Act, is right there in the statute - clever provisions inserted by skillful bureaucrats in virtually all laws to keep the doors open for their masters to circumvent the very laws, if needed.
To stem this pattern, the Parliament and the current government need to give more meaning, and at least some teeth to the Fiscal Responsibility and Debt Limitation Act 2005.
The fiscal deficit is projected to decline in line with the Fiscal Responsibility and Debt Limitation Act (FRDLA) deficit target as the authorities' broad-based tax policy and administration reforms take hold.
As the IMF mission chief explained to the Pakistani government over a conference call the other day, we'll have to 'improve a number of laws, including those relating to SBP's (State Bank of Pakistan) independence, debt limitation, money laundering, terror financing .
Rigo said the country would need to improve a number of laws, including those relating to SBP's independence, debt limitation, money laundering, terror financing, SOE's governance and so on.
In the conference call from Washington DC, Mr Rigo said the country would need to improve a number of laws, including those relating to SBP's independence, debt limitation, money laundering, terror financing, SOE's governance and so on.
Interestingly, the commission will also investigate if 'the cap prescribed under the Fiscal Responsibility and Debt Limitation Act, 2005 has been busted' and if so, reasons and justifications thereof.
Whether the cap prescribed under the Fiscal Responsibility and Debt Limitation Act, 2005 (hereafter: "the 2005 Act") has been busted?
It will further review if there were any violations of the Fiscal Responsibility and Debt Limitation Act, 2005, and if so, what were the reasons.
He said according to Fiscal Responsibility and Debt Limitation Act 2005, no government debt could exceed 60 percent of the country's Gross Domestic Product (GDP).
The Government of Pakistan took various steps to overcome the debt issue, like the debt limitation law, loan write-offs and rescheduling of debt and liabilities.
With respect to the fiscal rules that Pakistan has set for itself under the Fiscal Responsibility and Debt Limitation Act, Pakistan's debt should not be more than 60% of GDP.