sinking fund


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sinking fund,

sum set apart periodically from the income of a government or a business and allowed to accumulate in order ultimately to pay off a debt. A preferred investment for a sinking fund is the purchase of the government's or firm's bonds that are to be paid off. Usually the fund is administered by a trustee. See amortizationamortization
, reduction, liquidation, or satisfaction of a debt. The term amortization may also refer to the sum used for that purpose. The term is commonly used in ascertaining the investment value of securities.
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sinking fund

[′siŋk·iŋ ‚fənd]
(industrial engineering)
A fund established by periodically depositing funds at compound interest in order to accumulate a given sum at a given future time for some specific purpose.
References in periodicals archive ?
Thirteen out of 32 one and twobedroom flats at Russell Court on Adderstone Crescent now stand empty - with buyers seemingly put off by the huge increase in contribution to the sinking fund.
Dubai The absence of sinking funds and exorbitant maintenance charges throughout Dubai could leave existing investors out of pocket and new ones thinking twice before buying.
Exhibit 2 compares the contingent sinking fund structures for the five-year ISFDs and the ten-year ISFDs.
Each participating district has covenanted to budget, appropriate, and punctually pay such monies to cover note interest and sinking fund payments annually.
The analysis looks at debt service costs associated with alternative financing arrangements, as well as the cost of providing for a sinking fund for asset replacement.
The provisions of a typical sinking fund require the issuer to retire fixed principal amounts before maturity.
Redemption will be made by Bankers Trust Company as trustee pursuant to the sinking fund provisions of BGE's mortgage indenture.
Bonds called for the sinking fund will be redeemed in whole or in part on August 25, 2000, at the sinking fund call price of 100.
A Notice of Redemption will be mailed no later than July 26, 1999, to holders whose bonds have been selected for sinking fund redemption.
Littlefield does not levy an interest and sinking fund tax for its general obligation debt, relying on water and sewer system support for the series 1997 COs and detention center fund revenues to provide the debt service on the remainder of the city's outstanding CO debt ($10.
12 Preferred Stock on August 1, 1999 ("Redemption Date") at a sinking fund redemption price of $100 per share.
Certain maturities of the 2006 series A bonds are subject to mandatory sinking fund redemptions.