A method of eliminating a bond issue as an obligation of the issuer. This is accomplished by issuing a new bond issue and using the proceeds to purchase govern- ment obligations which will be escrowed and used to provide debt service on the original issue. The escrowed funds may provide debt service until maturity of the original issue (escrowed to maturity) or until the first call date (prerefunded to the call). See also: Defeased Bonds.

Issuing a longer- maturity bond in order to pay off an earlier bond (usually prior to its maturity), in order to take advantage of a drop in interest rates. also called prerefunding. see also refunding.

The replacement of debt prior to the original call Advertisement !-- var randomNum=Math.round(Math.random() * 100000000000); if ((!document.images && navigator.userAgent.indexOf('Mozilla/2.') = 0) || navigator.userAgent.indexOf("WebTV")= 0) { document.write('A HREF="http://c4.maxserving.com/adclick/site=5722/area=box_unit/aamfmt=normal/aamsz=boxunit/PageID=' + randomNum + '" target="_blank"'); document.write('IMG SRC="http://c4.maxserving.com/iserver/site=5722/area=box_unit/aamfmt=normal/aamsz=boxunit/PageID=' + randomNum + '" border="0"/A'); }else{ document.write('SCR'+'IPT src=http://c4.maxserving.com/gen.js?site=5722&area=box_unit&group=bodybar&PageID=' + randomNum + '/SCR'+'IPT');} //-- date via the issuance of refunding bonds.

arrearage asset swap

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