Sinking Fund

Business / Taxes / Sinking Fund: To ensure there’s money on hand to redeem a bond or preferred stock issue, a corporation may establish a separate custodial account, called a sinking fund, to which it adds money on a regular basis. Or, the corporation may be required to establish such a fund to fulfill the terms of its issue. The existence of the fund allows the corporation to present its investments as safer than those issued by a corporation without comparable assets. However, sinking fund assets may be used to call bonds before they mature, reducing the interest the bondholders expected to receive.

Other Words for Fund

Fund Adjective Synonyms: supply, stock, reserve, store, pool, cache, reservoir, repository, mine
Fund Noun Synonyms: finance, back, capitalize, stake, support, pay for, endow, grant, subsidize
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Other Words for Sinking

Sinking Verb Synonyms: queasy, nervous, uneasy, tense, apprehensive, unquiet, fretful, shaky, jittery, jumpy, anxious
Sinking Noun Synonyms: depressed, dejected, miserable, dolorous, doleful, mournful, forlorn, woeful, desolate, despairing, stricken, heavy-laden
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Purchase Fund

Business / Finance / Purchase Fund: Resembles a sinking fund, except that money is used to purchase bonds only if they are selling below their par value. MORE

Prerefunding

Business / Finance / Prerefunding: Procedure of floating a second bond at a lower interest rate in order to pay off the first bond at the first call date and to reduce overall borrowing costs. MORE

Prime Rate Fund

Business / Finance / Prime Rate Fund: A mutual fund that buys portions of corporate loans from banks and pays the interest to shareholders. MORE

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