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.
References in periodicals archive ?
Release date- 22082019 - Kroll Bond Rating Agency (KBRA) assigns a long-term rating of AA+ with a Stable Outlook to the Metropolitan Transit Authority of Harris County, Texas (the 'Authority') Sales and Use Tax Refunding Bonds Series 2019A and Taxable Series 2019B.
--$36.5 million Michigan Finance Authority hospital revenue and refunding bonds, series 2013A;
This rating resulted in low interest rates during the sale of $1.39 billion in bonds, which includes $349 million of refunding bonds to refund previously issued bonds and achieve total debt service savings of $43.8 million.
The city issued Series 2015 General Obligation Refunding Bonds at lower interest rates to retire the outstanding Series 2007 General Obligation Bonds with higher rates--3.14 percent versus 4.8 percent.
The first is for the issuance of refunding bonds, not to exceed $7.5 million, which will cover debts already on the books for the sales tax, currently set to expire in 2022.
The sale consists of USD$371.1 million of refunding bonds subject to the alternative minimum tax (AMT) and USD$133.6 million non-AMT refunding bonds structured with serial maturities from 2014 through 2034, the POS said.
Meanwhile, Bank of America Merrill Lynch (NYSE: BAC) has won USD441m in refunding bonds, for which the State will use the proceeds to refund certain previously issued general obligation bonds.
S&P also gave its A+ long-term rating to the city's USD788.595m (EUR564.811m) series 2010A GO refunding bonds, series 2010B GO taxable project bonds, and series 2010C GO taxable project and refunding 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.
Rating agency Fitch Ratings has announced its ratings for the airport revenue refunding bonds to be issued by Wayne County Airport Authority, Michigan.
ENPNewswire-July 31, 2019--KBRA Releases Report Assigning AAA Rating and Stable Outlook to State of Delaware General Obligation Refunding Bonds, Series 2019A
These are as follows:--$51.1 million GO refunding bonds, series 2018A 'AA+'; --$4.3 million taxable GO refunding bonds, series 2018B 'F1+'; and --$7.1 million taxable GO refunding bonds, series 2018C 'AA+'.