2.3.1.1 Mandatory Redemption

2.3.1.1 Mandatory Redemption

Mandatory redemption events are generally one of the following types:

1. Mandatory sinking fund redemption of term bonds
   
   
2. Redemption from unexpended bond proceeds
   
   
3. Redemption required by a fundamental change in situation adverse or potentially adverse to bondholders

Mandatory sinking fund redemption is the payment of scheduled principal in the form of redemption payments on term bonds rather than as maturity payments.

An unexpended bond proceeds redemption may be necessary if the issuer was unable to use bond proceeds to acquire or construct assets.