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Finance Dictionary and Glossary of Investment Terms
Prerefunding
Definition 1.
Procedure of floating a second bond at a lower interest rate in order to pay off the first bond at the first call date and to reduce overall borrowing costs.
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Definition 2.
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 advance refunding.
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