How does an advance refunding work?
How does an advance refunding work? Advance refunding refers to the practice of taking the funds received from a new bond issuance to pay off a prior issue's debt. The bond issuer places the proceeds from the sale of the newer issue (refunding bond) in an escrow account until they call the older (refunded bond) issue. What is the difference between a current refunding and advance refunding? A current refunding is one in which the outstanding (refunded) bonds are redeemed within 90 days of the date the refunding bonds are issued. In an advance refunding, the refunded bonds are redeemed...