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Glossary Term: DEBT SERVICE RESERVE FUND

Definition(s) for DEBT SERVICE RESERVE FUND:


1. ) The fund into which are paid monies which are required by the trust agreement or indenture as a reserve against a temporary interruption in the receipt of the revenues or other amounts which are pledged for the payment of the bonds. A common deposit requirement for a debt service reserve fund is six months or one-year’s debt service on the bonds. The debt service reserve fund may be initially funded out of bond proceeds, over a period of time from revenues, or by a combination of the above.



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