SOVEREIGN
Refinancing Cost Gap
Approximates the rate shock faced when old debt is refinanced at current yields.
Formula
Gap = Current funding yield - Coupon/yield on maturing debt
Variables: Current market funding rate; maturing debt cost
What it means
Approximates the rate shock faced when old debt is refinanced at current yields.
Example
Maturing debt costing 1.5% refinanced near 4.0% has a +250 bp refinancing cost gap.
How to interpret it
This concept should be read together with its market convention, measurement horizon and underlying instrument. BondStats presents it as an analytical reference rather than investment advice; instrument documentation and primary market rules remain authoritative.
Related Formulas
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