Pre-Refunded

REMARKS

Sometimes an issuer desires to pay off a bond in order to remove the debt from its books. However, the bond may not be immediately callable, and the issuer can not redeem the bonds at its discretion. In this case the issuer may deposit sufficient funds with a trustee into an escrow account so that the trustee can use the funds to pay all interest and principal on a specified call date in the future. In this case, the bond is said to be pre-refunded, and the pre-refunded date should be viewed as the date that the bond will be redeemed.