call protection

Call protection

A feature of some callable bonds that establishes an initial period when the bonds may not be called.

Call Protection

A provision in callable bonds that prevents the bond from being called for a certain period of time. Interest payments are guaranteed during the call protection period but not afterward. The bond may be prematurely redeemed at any point after the call date. Call protection exists to protect bondholders from the risk that interest rates will fall before the call date. The period of time during which the bond cannot be called is often called the cushion.

call protection

The prohibition against an issuer's calling a bond from an investor during the early years of the security's life. Municipals and industrial bonds usually have ten years of call protection, while protection on utility debt is often limited to five years. A longer period of call protection is advantageous to the investor because calls nearly always occur during periods of reduced interest rates. Also called cushion. See also noncallable, nonrefundable.
References in periodicals archive ?
Tenders are invited for Supply, installation, testing & commissioning of stretcher lift, of 15 passengers (1020 kg capacity) having:- front entrance only, stainless steel hair finish, power operated, side opening, anti-nuisance car call protection, overload device, nudging, emergency firemen's services, Emergency car light unit, infrared curtain door protection, door time protection, emergency alarm button, extra door time for lobby, door open/close button, manual rescue operation, belt inspection device, auto fan cut off and equipped with automatic rescue device for g+1 & g+2 Floors in 30/50 bedded maternity wings in chc s located at different places of uttar pradesh including three years warranty and five years annual maintenance of lift after completion of warranty period.
But police are regularly collecting Bhatta, to which they call protection money for their services they render to us and of which we are unaware" was the unanimous reply from traders, informing the beater of Aram Bagh police station - Arif Hussain - is collecting the amount daily.
Call protection for lenders was extended from October 15, 2013 to December 31, 2013.
5%, and provides for certain changes to the excess cash flow mandatory prepayment and call protection provisions under the facility.
TRADING standards officers are warning people to be wary of businesses offering cold call protection - by cold calling.
During the high-interest-rate periods of the 1970s and 1980s, many corporations issued debt with a form of call protection known as a nonrefunding provision.
Generally (keeping the call protection period constant), the longer the maturity, the greater the option value as there is more opportunity for interest rates to decline to permit profitable exercise.
There's been a number of these types of incidents involving what they call protection rackets, and extortion collections of credit,'' Larson said.
Now that the ten-year call protection is over for bonds issued prior to July 1, 1982, issuers are calling bonds to take advantage of today's lower interest rates.
Because securities with deferred cash payment typically have a subordinated standing in the issuer's capital structure and shorter call protection than conventional debt, their yields to maturity tend to be at least 200 basis points above those on conventional debt.
Following five years of call protection, on October 9, 2008 the Preferred Shares became callable at any time at the Liquidation Preference of $25.
The company may prepay the outstanding balance subject to customary call protection and is subject to customary mandatory repayment provisions in the event of certain asset sales, equity issuances or incurrence of new indebtedness.