Bond sinking fund,
Definition of Bond sinking fund:
A fund formed by periodically setting aside money for the gradual repayment of a debt or replacement of a wasting asset.
When a bondholder is close to defaulting on the bond, the company will buy the bond back to avoid further debt incurring on the security.
How to use Bond sinking fund in a sentence?
- In each period a certain percentage of gross output is set aside into a sinking fund for depreciation and replacement; this percentage is based on the length of life of machines, which is assumed to be given and constant.
Meaning of Bond sinking fund & Bond sinking fund Definition