Although they based their discussion on sinking-fund debt, we use term bonds instead to simplify the calculations involved, Sinking fund bonds
would produce similar results.
Conventional sinking fund bonds
typically make annual sinking fund payments, which commence after some grace period: |Mathematical Expression Omitted~ during the grace period; |Mathematical Expression Omitted~, a positive constant, on each sinking fund date, with a balloon payment |Mathematical Expression Omitted~ (with S* possibly equal to S) on the maturity date; and |Mathematical Expression Omitted~ for all other dates.
Sinking fund bonds require the issuer to make periodic cash contributions to a sinking fund trustee.
A company that needs to borrow should consider issuing sinking fund bonds.
After the initial offering, an increase in interest rates provides the issuer of sinking fund bonds with some favorable options.
Sinking fund bonds give the issuer more flexibility than serial bonds which require scheduled mandatory payments of both principal and interest.
3) This paper studies sinking fund bonds when an issuer has bought some of its own bonds in anticipation of future sinking fund requirements.
Section II, taking the level of prepurchases as given, presents an algorithm for deriving the optimal designation policy and for valuing sinking fund bonds.
To examine some of the common features of sinking fund bonds and to assess the prevalence of prepurchases, another sample, consisting of 257 sinking fund bonds, was collected from Moody's.
441 per cent First Mortgage Sinking Fund Bonds
, due August 15, 2035.
15, 2002-2019 with $3,475,000 special sinking fund bonds
15, 2024 and special sinking fund bonds
of $12,000,000 due Oct.