This prospectus provides you with a general description of the securities we may offer. A sinking fund is a fund containing money set aside or saved to pay off a debt or bond.A company that issues debt will need to pay that debt off in the future. Sinking funds; how kept and invested; income therefrom and application thereof. 16. We agree with the district court, however, that `the loans were secured with liens, which obviated any need for a sinking fund. A sinking fund provision in a bond adds an element of doubt over whether the bond will continue to pay a return until its maturity date. Application of Funds. We will not contribute funds to a separate account, commonly known as a sinking fund, to make any interest or principal payments on the Debentures. There is no guarantee that a strategy will meet its objective.