FUNDED DEBTS Meaning and
Definition
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Funded debts, in financial terms, refer to the obligations or liabilities that have been financed by the issuance of long-term debt securities. These debts are structured in a way that ensures repayment over an extended period, typically exceeding one year. The term "funded" implies that there is a specific source of funds allocated to meet these obligations, such as the proceeds from issuing bonds or other debt instruments.
Funded debts are commonly used by companies, governments, and other entities to finance their operations, capital investments, or large-scale projects. These debts often come with predefined terms, including fixed interest rates, maturity dates, and regular payment schedules. The principal amount owed is typically repaid gradually over the term of the debt, while interest payments are made periodically, usually on a semiannual or annual basis.
The issuance of funded debts is generally perceived as a more stable and secure financing method compared to short-term borrowings, as it offers a longer repayment horizon and often attracts lower interest rates due to being backed by collateral or specific revenue streams. Governments, for instance, may issue bonds funded debts to fund infrastructure development or social programs.
Funded debts are an essential part of financial markets and are closely monitored by investors and credit rating agencies. The ability of an entity to service its funded debts, meet interest and principal repayments promptly, and maintain a favorable credit rating are crucial factors that impact the cost of borrowing and the overall perception of an entity's financial health.
Common Misspellings for FUNDED DEBTS
- dunded debts
- cunded debts
- vunded debts
- gunded debts
- tunded debts
- runded debts
- fynded debts
- fhnded debts
- fjnded debts
- finded debts
- f8nded debts
- f7nded debts
- fubded debts
- fumded debts
- fujded debts
- fuhded debts
- funsed debts
- funxed debts
- funced debts
Etymology of FUNDED DEBTS
The term "funded debts" does not have a specific etymology as it is a combination of two commonly used words in finance and economics.
The word "funded" originates from the verb "fund", which can be traced back to Latin "fundus" meaning "bottom" or "bottom of a purse". In English, "fund" refers to monetary resources or assets held and used for a specific purpose, such as investment.
The word "debts" has its etymology rooted in Latin "debere", meaning "to owe". Over time, it has evolved and entered various languages, including Old English, where it became "dete" and eventually transformed into the modern English term "debt". It refers to an amount of money owed to someone or an obligation to repay borrowed funds.
Therefore, the term "funded debts" simply refers to debts that have been financed or backed by financial resources or assets.
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