§ 101318 Refunding Bond Interest Limits

This law says that when the government replaces old bonds with new ones, the new bonds can't have a higher interest rate than the old ones. Also, the government must start paying back the new bonds within a year and finish paying them off in 40 years or less.

Key Takeaways

•New bonds can't have a higher interest rate than the old ones.
•Payments on new bonds must start within a year.
•New bonds must be fully paid off in 40 years or less.

Example

Imagine the government has old bonds that pay 3% interest. They want to issue new bonds to replace them.

The new bonds can't pay more than 3% interest. The government must start paying back the new bonds within a year and finish paying them off in 40 years or less.

How to Calculate

No specific formula provided in the statute.

Identify the interest rate on the old bonds.
Ensure the new bonds' interest rate does not exceed the old bonds' rate.
Confirm that payments on the new bonds start within one year and are completed within 40 years.

The government has old bonds with a 4% interest rate.

Result: The new bonds can have an interest rate of 3.5%, payments start within a year, and are completed within 40 years.

Key Takeaways

•New bonds can't have a higher interest rate than the old ones.
•Payments on new bonds must start within a year.
•New bonds must be fully paid off in 40 years or less.

Example

Imagine the government has old bonds that pay 3% interest. They want to issue new bonds to replace them.

The new bonds can't pay more than 3% interest. The government must start paying back the new bonds within a year and finish paying them off in 40 years or less.

How to Calculate

No specific formula provided in the statute.

Identify the interest rate on the old bonds.
Ensure the new bonds' interest rate does not exceed the old bonds' rate.
Confirm that payments on the new bonds start within one year and are completed within 40 years.

The government has old bonds with a 4% interest rate.

Result: The new bonds can have an interest rate of 3.5%, payments start within a year, and are completed within 40 years.

Key Takeaways

Example

How to Calculate

Key Terms

References

§ 101318 Refunding Bond Interest Limits

Key Takeaways

Example

How to Calculate

Key Terms

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References