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.
References in periodicals archive ?
5 percent Senior Notes maturing in 2020 in accordance with the contractual make-whole provisions.
The company added that it intends to redeem any and all notes that are not tendered and accepted in the tender offer in accordance with the make-whole provisions under the indenture governing the notes.
200% Senior Notes due March 15, 2019 validly tendered and accepted for payment in Pfizer's previously announced tender offer and to fund the redemption of any of the tender notes that remain outstanding after the completion of the tender offer in accordance with the terms of the make-whole provisions of the indenture governing the tender notes.
The notes feature an optional redemption at the company's option, subject to make-whole provisions.
The notes become callable in August 2014 and can be redeemed prior to that subject to make-whole provisions.
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.