Conduit Financing

DEFINITION of 'Conduit Financing'

A financing arrangement involving a government or other qualified agency using its name in an issuance of fixed income securities for a non-profit organization's large capital project.

BREAKING DOWN 'Conduit Financing'

The government or other qualified agency is not responsible for paying the required cash flows to investors - all cash flows come directly from the project.

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RELATED FAQS
  1. Do nonprofit organizations pay taxes?

    Section 501 of the Internal Revenue Service (IRS) tax code exempts qualified nonprofit organizations from federal taxes. ... Read Answer >>
  2. Do nonprofit organizations have working capital?

    Discover why financial reserves in the nonprofit world are equivalent to working capital used by for-profit businesses, and ... Read Answer >>
  3. What are some examples of Cash Flow from Financing (CFF)?

    Learn about examples of cash flow from financing, such as how companies fund their operations and how it is reflected in ... Read Answer >>
  4. What are the main advantages of fixed income securities?

    Learn why the addition of fixed income securities are common among investors who are attempting to limit their exposure to ... Read Answer >>
  5. What's the difference between free cash flow and operating cash flow?

    Learn the difference between free cash flow and operating cash flow. Explore how analysts use earnings and cash flow when ... Read Answer >>
  6. How much debt is too much when calculating capital budgeting?

    Learn how companies determine how much debt is acceptable when funding a new project by using the net present value to estimate ... Read Answer >>
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