Refunded bond

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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.

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.
References in periodicals archive ?
29, 2007, with proceeds of the corporation's tobacco settlement asset-backed bonds, series 2007-1 and amounts held in accounts previously securing the refunded bonds.
The refunded bonds will be redeemed on July 1, 2008 at 101%.
27, 2005 with proceeds of the Agency's tobacco settlement asset-backed bonds (Sonoma County Securitization Corporation) series 2005 and funds held under the indenture previously securing the refunded bonds.
The escrowed funds are pledged for the purpose of paying interest and redemption price on refunded bonds.
The escrow holder, The Bank of New York, holds a separate irrevocable trust fund for the purpose of paying principal, interest and any redemption premium, when due, on the tax-exempt refunded bonds.
verified the mathematical accuracy of computations of the adequacy of initial investments and cash deposited to pay the debt service requirements of the refunded bonds.
The escrow holder, The Bank of New York, holds separate irrevocable trust funds for the purpose of paying principal, interest and redemption premium, when due, on the refunded tax-exempt bonds and taxable refunded bonds, respectively.
The escrow agent has been directed to use this fund for the purpose of paying principal, interest and redemption premium, when due, on the refunded bonds.
The refunded bonds dated October 15, 1997 will be redeemed on October 15, 2007 at 101%.
The bonds were refunded on August 31, 2006 with proceeds of The Economic Development Corporation of the City of Kentwood's Variable Rate Demand Limited Obligation Refunding Revenue Bonds, Series 2006B (Holland Home Obligated Group) and funds previously securing the refunded bonds as well as an equity contribution from Holland Home.
This fund is pledged irrevocably for the purpose of paying principal, interest and any redemption premium on refunded bonds.
The Series 1998A refunded bonds will be redeemed on June 1, 2008 at 101%.