REFUNDING ESCROW DEPOSITS (REDS)


Meaning of REFUNDING ESCROW DEPOSITS (REDS) in English

A financial instrument involving a forward purchase contract obligating investors to buy bonds at a certain rate when issued . The future date coincides with the first optional call date on existing high-rate bond . In the interim, investors' money is invested in secondary market Treasury bonds. The Treasuries mature around the call date on the existing bonds , providing the money to buy the new issue and redeem the old one.

Campbell R. Harvey. Hypertextual finance English glossary.      Английский словарь гипертекстовых финансов.