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Refund |
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RefundTo retire existing bond issues through the sale of a new bond issue, usually to reduce the interest rate being paid.Refund Similar MatchesPrerefundingPrerefundingProcedure of floating a second bond at a lower interest rate in order to pay off the first bond at the first call date and to reduce overall borrowing costs. Advance refundingAdvance refundingIn the context of municipal bonds, refers to the sale of new bonds (the refunding issue) before the first call date of old bonds (the issue to be refunded). The refunding issue usually specifies a rate lower than the issue to be refunded, and the proceeds are invested, usually in government securities, until the higher-rate bonds become callable. See: Refunding escrow deposits. Stopping curve refunding rateStopping curve refunding rateA refunding rate that falls on the stopping curve. Junior refundingJunior refundingIssuing of new securities to refinance government debt that matures in one to five years. Refunded bondRefunded bondAlso 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. Further SuggestionsNet advantage of refundingPrerefunded bond Senior refunding Low coupon bond refunding High coupon bond refunding Refunding Tax refund Refundable Nonrefundable |
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