Series 53: CUSIPs For Refunding Bonds

CUSIPs for Refunding Bonds

A bond refunding is the replacement of existing bonds with new “refunding” bonds. It is similar to the refinancing of a home mortgage, where a homeowner obtains a new mortgage with a lower interest rate to pay off an older, more expensive mortgage. The issuer of refunding bonds often seeks to lower its interest payments by paying off its previously issued (refunded) bonds with newly issued (refunding) bonds.

When a new issue will be used to refund an outstanding issue at one or more redemption dates and prices, the underwriter must apply to the MSRB for a reassignment of a CUSIP number for each part of the outstanding issue to be refunded. The application must include:

• The previously assigned CUSIP number

• The redemption dates and prices to be established by the refunding

• A des