Generally correct with a couple of important exceptions. Sally V thinks the financing is similar to what an individual does. Money is borrowed and paid back over time. Whereas, corporate bond funding generally does not have a requirement for a sinking fund or a mechanism for on going retirement of debt. In the covenant or legal document that underwrites the bond issuance secures the debt with nothing other than a promise to pay or in senior debt securitization through underling assets be it plant, equipment, or a stream of income. So upon maturity of the debt the repayment of principal comes from cash on hand, or refinanced through a new debt offering. If not, there is a bond default, and assets are sold to fulfill the covenant requirements. The last point concerns credit rating. If the credit rating of the firm is being downgraded, there is an assumption that, holding everything equal, the cost to finance or refinance debt will be higher.