Corporate Motives In Bond Refunding And Calling: A Survey

Abstract

This paper provides the results of a survey of corporations which called nonconvertible bonds in the period from 1962 to 1978.  The survey shows that interest saving is the most important motive for calls and refunding.  Moreover, the evidence indicates that there are profitable opportunities to call bonds trading at a discount.  The survey may help resolve conflicting results in evaluating the bond refunding process.