A requirement in the bond indenture that the firm pay off a portion of the bond issue each year is called

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A sinking fund is a requirement in the bond indenture that the firm pay off a portion of the bond issue each year. This helps to ensure that the issuer will have enough funds to pay off the bond when it matures. A call provision allows the issuer to repay the bond before maturity, a restrictive covenant places restrictions on the issuer's ability to take certain actions (such as incurring more debt), and a shelf registration allows the issuer to register securities with the SEC without selling them immediately.

A Requirement in the Bond Indenture That the Firm Pay