Deferred Call

Deferred call

A provision that prohibits the company from calling the bond before a certain date. During this period the bond is said to be call protected.

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Deferred Call

A provision in callable bonds that prevents the bond from being called for a certain period of time. Interest payments are guaranteed during the deferred call period but not afterward. The bond may be prematurely redeemed at any point after the call date. A deferred call exists to protect bondholders from the risk that interest rates will fall before the call date. The period of time during a deferred call is often called the cushion.