ATLANTA -- North Carolina's Supreme Court last Friday gave Concord, N.C., the green light to sell a refunding issue that is larger in size than the debt it refinances.

The ruling comes 10 months after Concord filed a test case to validate a technique that the city argued was authorized by state law and could result in substantial savings for local governments throughout North Carolina. Larger-principal refundings are useful when interest rates have dropped such that issuers would otherwise be forced to add cash to the escrow account to generate enough income to pay off the debt being refinanced.

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