Refunded Bond

Refunded Bond

A bond, originally issued as a regular or revenue bond, that is now secured by a second issue of bonds which are held in an "escrow fund" consisting of U.S. government debt until the first bond issue reaches maturity.

Notes:

This is sometimes referred to as a prerefunded bond.

See also: Bond, Escrow, Refunding

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Refunded bond

Also called a prerefunded bond, a bond that originally may have been issued as a general obligation or revenue bond but that is now secured by an escrow fund consisting entirely of direct U.S. government obligations that are sufficient for paying the bondholders.