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This will have to be refinanced at higher rates.
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The $12 trillion+ in federal debt held by the public will have to be refinanced at some point, and higher interest rates would only worsen our long-term fiscal outlook.
If the economy goes into a low-interest-rate recession, those 5% munis will be refinanced at 4%.
In this instance, the issuer would recall the bonds because the debt could be refinanced at a lower interest rate.
Investments can be refinanced either by higher energy and/or higher water costs.
When they come to be refinanced, it may have to be at much higher rates.
Specifically, most of the issues with a 5% or higher coupon rate are likely to be refinanced.
Both have high levels of debt that need to be refinanced by selling government bonds.
Those securities pay a higher rate than many other bonds precisely because of the risk the loans will be refinanced.
Moreover, higher rates should result in fewer mortgages being refinanced, good news for the securities that the loans back.
Very few HECMs are refinanced.
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