Callable Bond

外汇网2021-06-19 20:57:45 155

A bond that can be redeemed by the issuer prior to its maturity. Usually a pmium is paid to the bond owner when the bond is called.

Also known as a "redeemable bond".

|||The main cause of a call is a decline in interest rates. If interest rates have declined since a company first issued the bonds, it will likely want to refinance this debt at a lower rate of interest. In this case, company will call its current bonds and reissue them at a lower rate of interest.

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