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 ?
In the opinion of The Arbitrage Group, receipts from the cash and securities deposited in the trust fund will be sufficient for the timely payment of the principal, interest and any redemption premium on the refunded bonds.
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%.
The escrow fund is pledged irrevocably for the purpose of paying principal, interest and any redemption premium on refunded bonds.
The "AAA" rating reflects the fact that the refunded bonds are secured by an irrevocable escrow composed of direct, noncallable obligations of the U.
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 are now secured by an irrevocable escrow of noncallable U.
The refunded bonds will be redeemed on July 1, 2008 at 101%.
Ernst & Young has verified the mathematical accuracy of the computations showing that the escrowed securities plus a small initial cash deposit will be sufficient to pay interest, principal and the redemption price of the refunded bonds to their respective call dates.
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 refunded bonds include $10 million of the Series 1983 bonds maturing on Jan.