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Bonds issued under this chapter may be exchanged for not less than an equal principal amount and accrued interest of indebtedness to be retired thereby, including indebtedness not yet due, if the same be then redeemable or if the holders thereof be willing to surrender the same for retirement, but otherwise shall be sold and the proceeds thereof shall be applied to the payment of such indebtedness and accrued interest due or redeemable which may be so surrendered.