Hard Call Protection

Hard Call Protection

The period in the life of a callable bond in which the issuing company is not permitted to redeem the bond.

Notes:

This feature is important for investors purchasing redeemable or callable bonds. Hard call protection acts as sweetener for the bond itself and disallows the issuer from calling the bond under any circumstances.

See also: Bond, Callable Bond, Convertible Bond, Soft Call Protection, Sweetener

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Hard call protection

Usually refers to callable bonds. The period of time when a bond cannot be called, no matter what the interest rate is. That is, if the interest rate falls sharply, most callable bonds will be called (so the bond issuer can reissue at a lower interest rate). Hard call protection ensures that the holder of the bond can benefit when rates fall.