Conditional call options

Conditional call options

A protective guarantee that, in the event a high yield bond is called, the issuing corporation will replace the bond with a noncallable bond of the same life and terms as the bond that is being called.

Conditional Call Option

A term in some callable bonds requiring the issuer to replace it with a non-callable bond with the same maturity and similar terms if the bond is called prematurely. This protects the bondholders in the event that the bond is called. This provision is exclusive to junk bonds.
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