4.8.4.2 Bona Fide Debt Service Funds
An issuer may have up to a 13 month temporary period for amounts deposited in a bona fide DSF. A bona fide DSF is a fund used primarily to achieve a proper matching of revenues and debt service each bond year by depositing revenues in the fund until they are needed to pay debt service on a bond issue. The fund must be depleted each year except for an amount not to exceed the greater of (1) the earnings on the fund for the immediately preceding bond year, or (2) one-twelfth of the principal and interest payments on the bond issue for the immediately preceding bond year.