Pre-refunded Tax-Exempt Municipal Bonds (effective June 30, 2005)


Effective June 30, 2005.  Final treatment for Pre-refunded Tax-Exempt Municipal Bonds effective with the 2Q05 capital classification.

Pre-refunded municipal bonds are collateralized by securities that are structured to fund all the cash flows of the refunded municipal bonds until the bonds are callable.  Since the call date for the bonds, also referred to as the pre-refunded date, is a more accurate representation of the payoff date than the contractual maturity date of the bonds, OFHEO is modeling the bonds to mature on the call date in the stress test model.