IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v13y1967i7p511-524.html
   My bibliography  Save this article

Optimal Timing of Bond Refunding

Author

Listed:
  • H. Martin Weingartner

    (University of Rochester)

Abstract

Refunding is the operation by which the issuer of a bond calls it before maturity in order to replace it with another issue. The chief reason for calling is the interest saving which a new bond may make possible. In deciding whether to call a bond at any given time, the issuer must consider not only the potential savings from the current refunding, but also from future refundings up to some horizon fixed by financial policy. These savings must also be compared with those resulting from the decision to postpone refunding. This paper formulates the refunding problem in terms of a dynamic programming model in which the term structure of interest rates is utilized to obtain information about the future course of interest rates.

Suggested Citation

  • H. Martin Weingartner, 1967. "Optimal Timing of Bond Refunding," Management Science, INFORMS, vol. 13(7), pages 511-524, March.
    • Handle: RePEc:inm:ormnsc:v:13:y:1967:i:7:p:511-524
    DOI: 10.1287/mnsc.13.7.511
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.13.7.511
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.13.7.511?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Manak C. Gupta, 2016. "An Integrated Model for the Cost-Minimizing Funding of Corporate Activities over Time," Review of Economics & Finance, Better Advances Press, Canada, vol. 6, pages 1-18, November.
    2. Raymond C. Chiang & M. P. Narayanan, 1991. "Bond Refunding In Efficient Markets: A Dynamic Analysis With Tax Effects," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 14(4), pages 287-302, December.
    3. John Board & Charles Sutcliffe & William T. Ziemba, 2003. "Applying Operations Research Techniques to Financial Markets," Interfaces, INFORMS, vol. 33(2), pages 12-24, April.
    4. William Marshall & Jess B. Yawitz, 1980. "Optimal Terms Of The Call Provision On A Corporate Bond," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 3(2), pages 203-211, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:13:y:1967:i:7:p:511-524. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.