period of call protection

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Period of Call Protection

In callable bonds, a period of time during which a bond may not be prematurely redeemed. Interest payments are guaranteed during the call protection period but not afterward. The bond may be redeemed at any point after the call date, which means that the issuer could return the principal to bondholders and interest payments would cease. The period of call protection exists to protect bondholders from the risk that interest rates will fall before the call date. The period of time is often called the cushion.

period of call protection

References in periodicals archive ?
Their fully amortized payments often exceed $500 or even $1,000 per month, often unaffordable for someone starting out in their career, while unemployed college graduates leveraging deferment periods see their loan balances grow due to accruing interest.
A portion ($8,000) of the loans are subsidized, meaning the government pays the interest during deferment periods, but the remaining amount is unsubsidized and Brown will have to pay on the interest while in school or defer and accumulate the interest until repayment.
The loan deferment periods could be extended by the federal government, depending on the length of current deployments, said Lynn Hearnes, assistant commissioner of Missouri Student Assistance Resource Services.
For subsidized loans, the federal government pays the interest to the lender while you are enrolled or during deferment periods.
Both of these deals were originated with high percentages of deferred payment loans, including a significant amount of 300+ day deferment periods.