Series 79: Debt Retirement

Taken from our Series 79 Top-off Online Guide

Debt Retirement

When a company issues a bond, it raises capital in the short-term but creates an obligation that must be repaid in the long-term. A company may retire its outstanding debt serially by periodically redeeming bonds from different series within the same issue, or it may redeem a bond issue in one fell swoop. Especially in the latter case, if the company does not plan ahead, it could face cash flow problems when the time comes to repay the principal amount of the bond.

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