Cushion
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Cushion
In the context of project financing, the extra amount of net cash flow remaining after expected debt service.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Cushion
1. Period of time during which a bond cannot be called. Interest payments are guaranteed during the cushion, but not after, as the bond may be prematurely redeemed at any point after the call date.
2. A reserve account, or the function a reserve account serves, usually to pay off bad debt.
3. An advantageous debt-to-equity ratio, usually less than 40%.
2. A reserve account, or the function a reserve account serves, usually to pay off bad debt.
3. An advantageous debt-to-equity ratio, usually less than 40%.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
cushion
See call protection.
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.