State and Local Government Bond Refinancing and the Factors Associated with the Refunding Decision

Tima Moldogazíev, Martin J. Luby

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

The decision to refinance existing debt is a significant one made increasingly by public financial managers. Since state and local governments are somewhat limited by the Internal Revenue Service (IRS) in their ability to refinance debt, the decision to refund bonds is critical due to the potentially large economic benefits associated with refinancing bonds in the future at lower interest rates. Because of these potential benefits, it would be instructive for policy makers to know some of the covariates associated with this important debt management decision. To that end, this study analyzes refinancing bonds sold by California state and local government issuers between 2000 and 2007. The authors attempt to understand and record a list of issue-specific characteristics, market dynamics, and issuer-related data that are more likely to be related to likelihood to refinance. The authors then discuss the policy implications from these empirical findings.

Original languageEnglish (US)
Pages (from-to)614-642
Number of pages29
JournalPublic Finance Review
Volume40
Issue number5
DOIs
StatePublished - Sep 1 2012

Fingerprint

government bonds
indebtedness
debt management
management decision
interest rate
revenue
manager
market
ability
economics
Debt
Factors
Refinancing
State and local government
Government bonds

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics
  • Public Administration

Cite this

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State and Local Government Bond Refinancing and the Factors Associated with the Refunding Decision. / Moldogazíev, Tima; Luby, Martin J.

In: Public Finance Review, Vol. 40, No. 5, 01.09.2012, p. 614-642.

Research output: Contribution to journalArticle

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