Make Whole Call Provision

(redirected from Make-Whole Provisions)

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.
References in periodicals archive ?
Why did PCS agree to an equity split before negotiating the interest rate and make-whole provisions of the $15 billion in intercompany notes owed to Deutsche Telecom AG ("DT")?
The notes feature an optional redemption at the company's option, subject to make-whole provisions.
Management believes that these non-GAAP measures can be useful for investors to evaluate our financial performance by providing the results of our company's primary business operations, excluding, as applicable amortization of intangibles, certain litigation, CEO transition expenses and other unusual or non- recurring costs, as well as share based compensation expense under FAS 123-R and changes in the value of the make-whole provisions for our convertible note and takes into account the tax effect of these adjustments.
The Restated Indenture governing the Restated Notes will set forth other important terms of the Restated Notes, including, without limitation, provisions relating to the holders' put option, mandatory and option redemptions, interest make-whole provisions, and restrictive covenants.
Several structures also used optional calls with make-whole provisions.
In addition, the covenants give a special-purpose trust vehicle control of certain contractual payment rights and contain make-whole provisions for existing noteholders.
In its rating analysis, Fitch considers the impact of a more lumpy debt service structure and make-whole provisions on an issuer's financial flexibility.
However, low interest rates (due, in part, to interest rate hedges) and make-whole provisions in the company's debt agreements make the early prepayment of much of Con-way's debt relatively expensive and, therefore, uneconomic.