Refunding bonds

Bonds issued to retire bonds already outstanding. In a current refunding, outstanding bonds are called or mature within 90 days of the issuance of the refunding bonds. In an advanced refunding, the net proceeds of the refunding issue are used to purchase U.S. Government securities that are placed in irrevocable trusts with escrow agents to provide for all future debt service payments on the refunded bonds until the bonds are called or mature.