Definition of "Debt Retirement"

The repayment of specific debt. There are two methods used to retire debt--sinking fund and serial. Sinking fund and serial bonds are not types of bonds, just methods of retiring them. The sinking fund method, in which money is set aside each year to retire debt, is most commonly used for corporate debt. Conversely, the serial method is more commonly used in the debt retirement of municipal bonds. When bonds are issued in serial form, parts of the issue, known as a "series," are retired in various time schedules, usually semiannually or annually.