Defeasance Securities Clause Samples
The Defeasance Securities clause defines the types of financial instruments that can be used to legally discharge a borrower's obligations under a debt agreement, typically by setting aside sufficient funds or securities to cover future payments. In practice, this clause specifies that only certain high-quality, low-risk securities—such as U.S. Treasury obligations—are acceptable for this purpose, ensuring that the funds will be available when needed. Its core function is to provide a clear and secure mechanism for borrowers to satisfy their debt obligations in advance, thereby reducing risk for both parties and facilitating the release of collateral or liens.
Defeasance Securities. Securities of the type and maturity permitted under the terms of the related Mortgage Documents to be used in Defeasance.
Defeasance Securities. Any security used for defeasance must provide for the timely payment of principal and interest and cannot be callable or prepayable prior to maturity or earlier redemption of the rated debt (excluding securities that do not have a fixed par value and/or whose terms do not promise a fixed dollar amount at maturity or call date).
Defeasance Securities. The Defeasance Securities (described in Attachment 3 hereto), as such may be substituted pursuant to this Escrow Agreement, shall mature not later than the date needed to pay the interest accruing on the Defeased Bonds, when due, and to redeem the principal on the maturity date of the Defeased Bonds or the Redemption Date, as applicable.