Provisional Call Feature

Provisional Call Feature

A feature of a convertible issue that allows the issuer to call the issue during the non-call period if the stock reaches a certain price.

Notes:

For example, a convertible bond may allow a provisional call if the underlying common stock trades at 150% of the conversion price for 30 consecutive days.

See also: Bond, Callable Bond, Conversion Price, Convertible Bond, Issuer, Contingent Convertibles

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Provisional call feature

A stipulation in a convertible issue that allows the issuer to call the issue during the noncall period if the price of the stock reaches a certain level. In the case of convertible securities, right of an issuer to accelerate the first redemption date if the underlying common should trade at or above a certain level for a sustained period. Most typical terms are 150% of conversion price for 20 consecutive days. Note that under these circumstances the security has appreciated, at a minimum, 50% since being issued.