Make Whole Call Provision

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Make Whole Call Provision

A provision in some bond agreements allowing the issuer to redeem the bond before maturity if it gives bondholders a lump-sum payment equal to the net present value of coupons they would have received, had the bond not been called. A make-whole call provision allows the issuer to reduce the amount of debt on its balance sheet, if need be, while also limiting bondholders' risk.