Home > Term: refunding
refunding
The issuing of new debt for purposes of retiring earlier debt in order to take advantage of a drop in interest rates. The funds received from the new lower interest debt are invested in low-risk government securities, backing the original debt, with the maturity schedules corresponding to the call dates of the original bonds. Also known as Advance Refunding and Prerefunding.
- Part of Speech: noun
- Industry/Domain: Financial services
- Category: Funds
- Company: Merrill Lynch
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