Economics Bonds Questions
Bond refunding refers to the process of replacing an existing bond issue with a new bond issue, typically with lower interest rates. This is done by the issuer of the bond in order to take advantage of lower interest rates in the market, thereby reducing their borrowing costs. Bond refunding can be beneficial for the issuer as it allows them to save money on interest payments over the life of the bond. It is often done when interest rates have decreased significantly since the original bond issue, making it financially advantageous for the issuer to refinance their debt.