What Is A Callable Bond?

1.	What Is A Callable Bond?
Answer» Callable bonds, also known as "redeemable bonds," can be redeemed by the issuer prior to maturity. Usually a premium is paid to the BOND owner when the bond is called. 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. In this case, the company will call its current bonds and reissue new, lower-interest bonds to save money. Callable bonds, also known as "redeemable bonds," can be redeemed by the issuer prior to maturity. Usually a premium is paid to the bond owner when the bond is called. 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. In this case, the company will call its current bonds and reissue new, lower-interest bonds to save money.

Answer»

Callable bonds, also known as "redeemable bonds," can be redeemed by the issuer prior to maturity. Usually a premium is paid to the BOND owner when the bond is called.

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. In this case, the company will call its current bonds and reissue new, lower-interest bonds to save money.

Callable bonds, also known as "redeemable bonds," can be redeemed by the issuer prior to maturity. Usually a premium is paid to the bond owner when the bond is called.

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. In this case, the company will call its current bonds and reissue new, lower-interest bonds to save money.

What Is A Callable Bond?

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