And he desired to know, "Whether such zealous gentlemen could have any views of refunding
themselves for the charges and trouble they were at by sacrificing the public good to the designs of a weak and vicious prince, in conjunction with a corrupted ministry?" He multiplied his questions, and sifted me thoroughly upon every part of this head, proposing numberless inquiries and objections, which I think it not prudent or convenient to repeat.
Market participants will likely recommend previously utilized tools or develop new tools or mechanisms to simulate the beneficial impacts of tax-exempt advance refundings
. Issuers should be particularly mindful of the unique risks and uncertainties associated with these options and discuss these options with their municipal advisors and legal counsel.
Neither of the refundings
will extend the final maturity of the bonds.
Xing, "Advance Refundings
of Municipal Bonds," NBER Working Paper No.
Although interest rates are down, lowering yields to investors, so-called municipal bond "refundings
" are up.
Excluding accelerated premiums from refundings
of USD0.2m, normal earned premiums in this year's first quarter were USD3.5m, 49% lower than the USD6.9m from the comparable 2009 period, net of accelerated premiums from refundings
These deals include new money issues, current and advanced refundings
(transactions involving replacing higher-interest bonds with lower-interest ones), and interest-rate swaps.
over the six month period totaled $63.2 billion, versus $28.8 billion a year ago.
Thus, small deviations from capital structure neutral refundings
can generate premiums in callable bond values.
23, Accounting and Financial Reporting for Refundings
of Debt Reported by Proprietary Activities, concerns accounting and reporting procedures when new debt is issued and its proceeds are used to pay off old debt (see "GASB ED on Debt Refundings
," JofA, Sept.93, page 24).
Treasury and compensate state and local governments for losses in connection with advance refundings
. The 3,603 advance refundings
, conducted between 1990 and 1994 resulted in yield burning--an act in which dealers overcharge issuers for open-market Treasuries sold for refunding
escrows, and the markups reduce or "burn" the investment yield so that it is below the bond yield and does not generate illegal arbitrage profits.
Long-term debt issuance grew by 78.5 percent, refundings
were up more than 50 percent, and new capital issuance climbed by 48 percent.