Bonds issued to replace outstanding bond issues. Usually used to replace callable bonds when interest rates drop. American Banker Glossary
* * *
refunding bonds UK US noun [plural] STOCK MARKET
► new bonds that replace old bonds that have matured (= been paid back), and that may be sold for cash or exchanged for the older bonds: »
The Fund may also invest without limit in advance refunding bonds.
Financial and business terms. 2012.