Refunding
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Refunding[1] 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
References
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- ^ Page Module:Citation/CS1/styles.css has no content."Refundings and Redemption Provisions" (PDF). msrb.org. Archived (PDF) from the original on 3 October 2023. Retrieved 4 August 2025.
