Andrew Kalotay

Most tax-exempt tenders saw low participation, which is good news to the taxpayers. The poorer the participation in the tender, the less is the waste from these premature refundings prior to the call date.

Assuming the taxable and tax-exempt rates are highly correlated (and in fact they are), we can show that the expected cost of a fairly priced callable bond exceeds that of an optionless bond.

What if there was a debt structure that essentially "refunded" on autopilot, and without transaction cost? Well, the ratchet bond does exactly that.

The 5% non-callable-10 structure, which has been the standard for municipal bonds, was tailor-made for advance refunding

Muni professionals’ knee-jerk response is that the phrase is clear, until they attempt to explain it. And then they realize that it is nonsensical.