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TeachMeFinance.com Advance Refunding -- For government securities, it is swapping of securities before their due date for government with issues that mature at a more distant date. Advance refunding that prolongs the national debt is the means by which economic disorders resulting from once-for-all elimination of national debt are avoided. For municipal bonds , it is the advance issue of new bonds normally some years before the first maturing date of the old bonds that are to be refunded. The refunding issue usually carries a lower rate than the old bonds, enabling investment of the takings in government securities till the time when the higher-rate issue is subject to redemption. This is called prerefunding and it has been constrained by a number of tax acts. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2007 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.