Legal Definitions - funded debt

Funded debt is a type of debt that is secured by a bond or debenture and is meant to replace short-term, floating, or unsecured debt. It can also refer to a state or municipal debt that will be paid out of an accumulation of money or by future taxation.

• A company issues bonds to raise money for a new project. The bonds are secured by the company's assets and are considered funded debt.
• A city issues municipal bonds to finance a new stadium. The bonds will be paid back over a period of years and are considered funded debt.

These examples illustrate how funded debt is a long-term debt that is secured by a bond or debenture and is meant to replace short-term, floating, or unsecured debt. It is a way for companies and governments to raise money for large projects or expenses that they cannot pay for upfront.