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Reasons of Refunding

The slides tells about the reasons why refunding should be done

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Reasons of Refunding

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  1. Reasons of Refunding: Is to obtain, avail and utilize lower cost funds in place of pre-existing high interest bonds already issued before in open market. Helping to stabilize debt-equity ratio One of the reason to attract new investors and funds

  2. Reasons of Refunding:  Another reason for refunding is to remove any undesired restrictions and covenants that are tied to the terms of the existing bonds being refinanced. new debt is, issued at a lower rate of interest than the refunded issue and, results in a significant reduction in interest expense for the issuer.

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