Debt Service Reserve Fund
The fund established as a reserve for payment of debt service on revenue bonds in the event there is insufficient money to make a debt service payment.
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Reasonably Required Reserve or Replacement Fund
A fund maintained to provide Security to bondholders that does not exceed the least of (i) 10% of the stated Principal amount of the Bond Issue (Issue Price if more than a de minimis amount of Original Issue Discount or Premium), (ii) the maximum annual Principal and Interest requirements of the Bonds, or (iii) 125% of the average annual Debt Service requirements of the Bonds.
See Also
Debt Service
The amount of principal and interest required to be paid on an issue of bonds.
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Hundreds of Terms and Concepts
Investor Letter
A letter from a purchaser of bonds in a private placement typically acknowledging any transfer restrictions applicable to the bonds and attesting to the purchaser’s eligibility to purchase the bonds.