Additional bonds test

A test for ensuring that bond issuers can meet the debt service requirements of issuing any new additional bonds.

Additional Bonds Test

A financial statement that a company must issue before making a new issue of a bond. The additional bonds test shows what assets the potential issuer has available to pay coupons on the bond. It helps ensure the issuer is able to service debt on the new issue. The additional bonds test increases the transparency of the market and helps one accurately gauge the risk of the new bond issue.

additional bonds test

A financial standard that must be met before issuing bonds that use as security revenues or assets already pledged for outstanding bonds.

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.

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