Refunding occurs when an entity that has issued callable bonds calls those debt securities from the debt holders with the express purpose of reissuing new debt at a lower couponrate. In essence, the issue of new, lower-interest debt allows the company to prematurely refund the older, higher-interest debt.
On the contrary, non-refundable bonds may be callable but they cannot be re-issued with a lower coupon rate—they cannot be refunded.
refunding, this, article, does, cite, sources, please, help, improve, this, article, adding, citations, reliable, sources, unsourced, material, challenged, removed, find, sources, news, newspapers, books, scholar, jstor, december, 2009, learn, when, remove, th. This article does not cite any sources Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Refunding news newspapers books scholar JSTOR December 2009 Learn how and when to remove this template message Refunding occurs when an entity that has issued callable bonds calls those debt securities from the debt holders with the express purpose of reissuing new debt at a lower coupon rate In essence the issue of new lower interest debt allows the company to prematurely refund the older higher interest debt On the contrary non refundable bonds may be callable but they cannot be re issued with a lower coupon rate they cannot be refunded See also editRefinancing nbsp This finance related article is a stub You can help Wikipedia by expanding it vte Retrieved from https en wikipedia org w index php title Refunding amp oldid 1166299715, wikipedia, wiki, book, books, library,
