The Bond Buyer today added a new "advance refunding" calculator to its web site. This sophisticated tool combines analyses of savings and "option value" to help state and local governments maximize the savings they can reap from refunding their outstanding debt.

Current industry practice focuses primarily on present-value savings from a refunding. The new calculator, available at, adds the missing dimension of opportunity cost by comparing the savings to the value of waiting for potentially more attractive rates. It then makes a recommendation on whether the refunding should go forward.

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