Hard debt definition
Hard debt means debt for which there is a requirement for repayment that would result in foreclosure if not repaid and other credit terms indicating such debt arises from a truly arm’s-length transaction. Deferred or forgivable debt, debt repayable to a “Related party” (including, but not limited to, a loan from a Sponsor to an ownership entity in which the Sponsor has an “Ownership interest”), or debt which is to be repaid only from excess cash flow or upon certain other conditions is not considered such hard debt and is not included in (and may be removed by the FHLB from) the calculation of the “Debt coverage ratio,” “Net cash flow,” and other AHP-related calculations.