Refunded bond

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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.

Refunded Bond

A bond whose principal is held in an escrow account, generally invested in Treasury securities or something else risk-free, until such time as the bond matures. That means that there is no possibility of default on the principal; as a result, refunded bonds usually have the highest possible credit ratings. They are also called prerefunded bonds.

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4) These amounts are conservative, as data limitations restricted our analysis to only 65 percent of all pre-refunded bonds traded over this period.

Of particular interest in the premium bond area are pre-refunded bonds - short-term, tax-exempt municipal bonds which are backed by U.

Interest and principal payments for pre-refunded bonds are funded from securities in an escrow account.