(Un)Calculated Risk | by Peter Orr of Intuitive Analytics

HELP! Can SOMEONE Calculate Refunding PV Savings?

Posted by Peter Orr on May 02, 2013

"If people do not believe that mathematics is simple, it is only because they do not realize how complicated life is."                               - John von Neumann

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The RIGHT refunding discount rates to use? Wrong question...

Posted by Peter Orr on Aug 14, 2012

 I finally know what distinguishes man from the other beasts: financial worries.
- Jules Renard

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Refunding Efficiency: Not the Holy Grail of Decision Criteria

Posted by Peter Orr on Mar 24, 2010

Lots has been studied and even reported on the decision criteria involved in pulling the trigger on a public finance refunding. When is the right time? What bonds do I choose? What savings target do I use? The old rule of thumb that present value (pv) savings should be at least 3% of refunded par is taking some criticism which I won't repeat here. Suffice it to say it's a threshold originally conceived by bankers and as such, the bar for a "Go" decision is not very high. I personally think it's age discrimination; this calculation does have a good three decades under the belt...

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