California Code, Government Code - GOV § 43738

If the refunding bonds are issued in whole or in part to refund before maturity an indebtedness evidenced by bonds, notes, or other evidences of indebtedness, which according to their terms are subject to call or payment before maturity at a price in excess of par, the refunding bonds may be exchanged at not less than their par value for such other bonds, notes, or evidences at the price specified therein for payment before maturity, subject to adjustment of accrued interest to the date of exchange.