debt service

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Debt service

Interest payment plus repayments of principal to creditors (retirement of debt).
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Debt Service

The amount of money required to make payments on the principal and interest on outstanding loans, the interest on bonds, or the principal of maturing bonds. An individual or company unable to make such payments is said to be "unable to service one's debt." An example of debt service is a monthly student loan payment. See also: Debt service coverage ratio.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

debt service

Funds required to meet interest expenses, principal payments, and sinking fund requirements during a specific time period. A firm's ability to service its debt is estimated by comparing cash flow with debt service.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

debt service

The amount necessary to make principal and interest payments on a loan.It does not include amounts collected each month as a reserve for insurance or real estate taxes and does not include payments for private mortgage insurance.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
The taxes required to service the debt would recede to 0.4 percent of GDP.
Traditional lenders won't fund developers with flawed credit histories or less than adequate cash flow to show they can service the debt. Securitization of commercial mortgage loans has fostered a strong consolidation trend to meet the capital market's need for stability and high returns.
"We have a lot of wonderful things going on," says Tilghman, "but we've not been able to raise enough money to service the debt and to build the staffing we need to keep the organization secure."
Yet half the government's income goes to service the debt. Children don't eat, clinics don't have medicine, teachers have no books, yet the creditors must be paid.
But Philip Dodge, senior vice president at Southeast Research Partners in Florida, said if appeals fail and Exxon is forced to pay the full $5 billion, the company's debt ratio could increase by as much as 30 percent, and a significant portion of operating profit could be used to service the debt. Moreover, Exxon's legal tab is not yet complete: Hundreds of lawsuits remain outstanding.
* For the creditor to recover its investment, the property must be sold to outsiders, the debtor must obtain outside financing or the property must be placed in service and generate sufficient cash flow from operations to service the debt.
If the purchase price is borrowed from a bank or other financial institution, the purchaser must be able to service the debt from the business's earnings--and prove the company's credit is strong enough to obtain a loan after an owner's death.
(A qualified lender is a bank, insurance company, mutual fund or corporation actively engaged in the business of lending money.) In addition, the sponsor can deduct the contributions it makes to the ESOP to service the debt and can deduct dividends distributed on the stock held by the ESOP to the extent they are dedicated to debt service on the ESOP loan.
Dr Mwangi said Kemsa has entered into service agreements with a majority of the county governments to open a special purpose account to service the debts.Kemsa has continued to appreciate the challenges that counties are facing in terms of funds and, through mutual agreements, has previously extended the credit period to 45 days, he said.