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Debt Limit - A statutory or constitutional limit on the principal amount of debt that an issuer may incur (or may have outstanding at any one time).

Debt Service - The amount of money necessary to pay interest on an outstanding debt, the principal of maturing serial bonds and the required contributions to a sinking fund for term bonds.

Debt Service Reserve Fund - A fund into which monies are paid that are required by the trust agreement or indenture as a reserve against a temporary interruption in the receipt of the revenues or other amounts pledged for the payment of the bonds. A common deposit requirement for an issue might be the maximum aggregate annual debt service requirement for any year remaining until the bonds reach maturity.

Dollar Bond - A bond which is quoted on a dollar basis, rather than the usual yield to maturity basis applicable to most municipal bonds. Dollar bonds are usually the term bond portion of a municipal issue.

Double-Barreled Bond - A bond secured by the pledge of two (or more) sources of payment. In some states a bond secured in the first instance by a user charge (e.g., water or sewer) may be additionally secured by ad valorem taxes.


Electric Revenue Bond - A debt contract secured by income pledge from operations of electricity generation and/or distribution facilities.

Escrowed-to-Maturity Bond - A bond whose principal and interest are secured by payments from a portfolio of U.S. Government securities held in escrow by a trustee. Such bonds are normally rated "AAA."

Extraordinary Call - The authorized issuer redemption of a bond prior to its first stated call date; it is normally invoked when bond issue proceeds cannot be utilized at economic rates. This call is frequently exercised by issuers of housing bonds, in periods of declining interest rates, from unexpected proceeds (e.g., when bond-funded mortgages cannot be placed because their rates exceed market rates).

Extraordinary Mandatory Redemption - The requirement of an issuer of a municipal security to call or redeem all or part of the outstanding bonds of a particular issue upon the occurrence of certain events. For example, the issuer may be required to call or redeem bonds when: proceeds of an issue are not expended for the purpose of the issue within a given time frame, when excess bond proceeds exist after the completion of the project, or when the facility has been substantially destroyed during construction owing to an accident. The last situation is also known as a "calamity call" or "catastrophe call."

Extraordinary Optional Redemption - The right of the issuer to call or redeem an issue of bonds upon the occurrence of certain events. For example, the right to extraordinary optional redemption of an issue may be exercised when mortgages are prepaid in connection with a housing revenue bond issue.

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