Refunded bond

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 ?
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.
The refunded bond proceeds financed state government building improvements in Trenton, the state capital.
It maintains an unenhanced rating of 'AA-'/Stable on the refunded bonds based on the GO pledge of the state's full faith and credit (AA-/Stable).
interest and call premiums, if any, on the Refunded Bonds;
However, this tax increase will not cover any taxable property located in the "dissolved school district." Other conditions provide that the net interest rate, maturity date, and "tax levy" of the refunding bonds cannot exceed that of the refunded bonds. The Code also states that the provisions of subsection (c) are "applicable to school districts that were dissolved and their territory annexed" under an April 2003 referendum, and that the subsection's provisions are, besides this limitation, "inoperative 2 years after the effective date."
There are three types of refundings--current, advance and crossover refundings; they are distinguished by when the refunded bonds are called and the purpose of the escrow account created by the refunding bonds.
Fitch also maintains an unenhanced rating of 'AA-'/Stable on the refunded bonds based on the GO pledge of the state's full faith and credit (AA-/Stable).
Securities and Exchange Commission, assigned a rating of 'AAApre' to the $90,080,000 State Public Works Board of the State of California (SPWB) lease revenue bonds (Department of Education) 2009 series B (Riverside Campus Project) (the refunded bonds).
New York: Fitch Ratings has assigned a rating of 'AAApre' to the $90,080,000 State Public Works Board of the State of California (SPWB) lease revenue bonds (Department of Education) 2009 series B (Riverside Campus Project) (the refunded bonds).
The refunding bonds will reach final maturity in 2028, without extending the maturities of the refunded bonds.
New York: Fitch Ratings has assigned a rating of 'AAApre' to the following $994,690,000 State of California (State) various purpose general obligation (GO) bonds ('the refunded bonds'):
The proceeds from the GO Refunding Bonds, Series 2016 will be deposited into an escrow fund established with the trustee and will satisfy the interest on the refunded bonds until the redemption date (September 1, 2020).