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.

The calculator, developed by Andrew Kalotay Associates Inc., builds on the firm's extensive expertise in option valuation and debt management.

In addition to Kalotay's proprietary algorithms, the calculator incorporates multiple data feeds, so issuers can get an up-to-date assessment of their refunding opportunities. The inputs include:

* Bond terms and conditions data from Mergent Inc

* Municipal market yields from Municipal Market Advisors

* Treasury yields from the BondDesk Group LLC.

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