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Refunding Bond

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Refunding Bond
A bond that retires another bond before the first bond matures. A company may issue a refunding bond for a number of reasons, but mainly because of a decline in interest rates, which reduces the cost of funding. Refunding bonds deprive bondholders of the first bond from future coupon payments to which they would otherwise of have been entitled. Most bonds are nonrefundable for at least five or 10 years after issue, but a refunding bond may be issued afterward.
refunding bond
A bond that is issued for the purpose of retiring an outstanding bond. Issuers refund bond issues to reduce financing costs, eliminate covenants, and alter maturities. See also crossover refunding bonds, prerefunding.
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The refunded and refunding bond issues are similar to the actual bond issues, although some details not related to this discussion have been slightly modified.
Calculating a refunding savings with Mun-Ease by Wrasman, Brent / Government Finance Review
1 million in outstanding taxable refunding bonds, series 1 rated 'AAA'; --$394.
Fitch Withdraws Ratings for Irvine Ranch Water District JPA, ... by Business Wire
Because the escrow account can only earn the low refunding bond rate, but must pay the high refunded bond rate, the escrow account requires more funds, resulting in a higher issue size, further resulting in a lower savings level.
Understanding current and advance refundings by Jordan, Larry / Government Finance Review
 
 
 
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