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Doomsday Call
(redirected from Doomsday Calls)

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Doomsday Call
A provision in a bond or other fixed income security allowing the issuer to redeem the security before maturity. When a doomsday call is exercised, bondholders are paid a fixed amount, either the par value or a certain percentage depending on the nature of the provision. Bond issuers include doomsday calls in some agreements to hedge against interest rate risk. That is, if interest rates lower significantly, they can exercise the doomsday call and issue a new bond at a lower interest rate. Informally, they are known as Canada calls, as they are relatively common on Canadian corporate bonds. See also: Callable bond.


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