What do advance refundings NOT achieve?

Advance refundings primarily involve the issuance of new bonds to pay off an existing bond before its maturity date, often when interest rates have fallen. The primary objectives of advance refunding are to achieve savings through lower interest rates, optimize debt profiles, and restructure long-term liabilities effectively.

When considering the functions of advance refundings, the termination of restrictive bond covenants is not inherently a goal or benefit of this process. Bond covenants are specific conditions set in bond agreements that protect the interests of bondholders, and these covenants are typically established to ensure the issuer maintains certain financial criteria or behaviors. Advance refundings do not inherently alter or remove these covenants; rather, they focus more on financial savings and restructuring existing debts rather than modifying terms or conditions that were established.

The other options highlight purposes that align closely with the objectives of advance refundings, such as taking advantage of lower interest rates or providing a way to restructure liabilities. Therefore, the statement regarding the termination of restrictive bond covenants accurately reflects what advance refundings do not achieve.