Extendable Note

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Extendable Note

A bond in which the date of maturity may be extended. Whether the issuer, bondholder, or both have the authority to extend the maturity depends upon the specific terms of the bond agreement. If a maturity is extended, the issuer continues to pay coupons. Thus, extendable notes usually sell at a higher price than other bonds because there is the possibility for a higher return. They are also called extendable bonds.
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Each of the eight series permitted will be a separate security instrument, including current interest, zero coupon, zero coupon step-up, auction market, income, floating rate, stepped coupon and zero coupon extendable bonds.