Callable Bonds. A Callable Bond offers the option to the issuer to redeem the Bond before its maturity date. Redemption may be mandatory for the issuer based on the fulfilment of some preconditions included in the initial terms of issue or at the issuer's option and all or part of the issued Bond may be redeemed before its maturity date. Investors, whose Bonds are called, are paid a specified call price. Any (positive) difference between a Bond's call price and nominal value is the call premium. Call provisions expose investors to additional risks and are therefore issued with higher yields than comparable Bonds with no such provisions.
Appears in 2 contracts
Sources: Agreement for the Provision of Investment Services and Activities and Ancillary Services to Corporate Professional Client, Agreement for the Provision of Investment Services and Activities and Ancillary Services to Retail Client