REFUNDING BONDS OR NOTES.

(a) A municipality may issue refunding bonds or notes to refund one or more series or issues of bonds or notes.

(b) Refunding bonds or notes have the same priority of lien on the revenue pledged to their payment that the bonds or notes being refunded have, except that if all the outstanding bonds or notes of two or more series or issues of bonds or notes are refunded in a single issue of refunding bonds or notes, the lien of all refunding bonds or notes is equal. A refunding bond or note may not have a priority of lien greater than the highest priority of lien of the bonds or notes being refunded.

(c) Refunding bonds or notes must bear interest at the same or lower rate than that borne by the bonds or notes being refunded unless it is shown mathematically that:

(1) a saving will result in the total amount of interest to be paid; and

(2) the annual principal and interest burden will not be increased so as to impair the rights of the holders of any bonds or notes, if any, having a prior or inferior lien.

(d) Bonds or notes may be refunded by issuing refunding bonds or notes to be:

(1) exchanged for the bonds or notes being refunded or cancelled; or

(2) sold, with the proceeds of the sale being used to redeem and cancel the bonds or notes being refunded.

(e) A municipality may provide in a refunding bond or note issue money necessary for paying:

(1) any call premium; and

(2) interest to the date set for calling for redemption the outstanding bonds or notes.