# Redeemable Bond

## Redeemable Bond

A bond that the issuer may buy back from investors before maturity. The bond may be called at the discretion of the issuer, within certain limits. When the bond is called, the bondholder receives the par value (or sometimes slightly more) and does not receive any more coupons. Redeemable bonds are issued to allow the issuers to hedge against interest rate risk. That is, if interest rates fall significantly, they can call the bond and issue a new bond at a lower interest rate, reducing their liabilities. However, to protect the bondholder, most redeemable bonds also include call protection, which prevents the bonds from being called for a certain period of time and thereby guarantees the current interest rate for that time. A redeemable bond is also called a callable bond.
References in periodicals archive ?
The yield of a redeemable bond is also known as the yield to maturity (YTM) or redemption yield.
1 Calculating the internal rates of return for Kite's redeemable bond Time [pounds Discount Present Discount Present sterling] factors at value at factors at value at a discount 8% a discount 10% rate of 8% rate of 10% Year 0 (100) 1.
The yield of a redeemable bond equals the internal rate of return (IRR) of the bond price, the annual interest received and the final redemption amount.
2 Calculating the internal rates of return for Kite's redeemable bond taking account of change in market value after year one Time [pounds Discount Present Discount Present sterling] factors at value at factors at value at a discount 12% a discount 15% rate of rate of 12% 15% Year 0 (90) 1.
As part of the new arrangements, the Welsh Government will be able to issue redeemable bonds on the international bond market to institutional investors, governments, traders and individuals.
Secured Redeemable Bonds -- Series I Tranche I 164.
Proposed Secured Redeemable Bonds -- Series I Tranche II 17.
2bn serial redeemable bonds of Malaysian company YTL Power International Berhad (KUL:YTLPOWR), YTLPI.
7m) non-convertible redeemable bonds programme of local power generation firm NTPC Ltd (BOM:532555).
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