Funded Debts Law and Legal Definition

Funded Debts are usually interest-bearing bonds or debentures of a company. They are loans and obligations with a maturity of longer than one year; usually accompanied by interest payments. They are also called long-term debt. It does not include short-term loans, preferred or common stock. Funded debt is generally used for capital outlays, which usually involves a business' need to buy the basic necessities for its operations, such as facilities and major assets.

The following is an example of a federal statute defining funded debts:

According to 45 USCS B' 1303 [Title 45. Railroads; Chapter 22. Conrail Privatization; General Provisions], the term "funded debt" means "all debt created, assumed, or guaranteed, directly or indirectly, by the Corporation and its subsidiaries which matures by its terms, or is renewable at the option of the Corporation or any such subsidiary to a date, more than 1 year after the date of the original creation, assumption, or guarantee of such debt by the Corporation or such subsidiary."