Level Debt Service is a municipal charter provision stating that debt payments must be relatively equal from year to year so that required revenue projections are easier to make. Bondholders can benefit from these provisions since their anticipated cash flows are guaranteed stable.
For example, a bondholder purchasing municipal bonds to generate retirement income might want to consider level debt service muni bonds in order to ensure they receive predictable payment amounts each month or quarter as they’re relying on that income.
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