pickup bond

Pickup bond

A bond with a relatively high coupon that is close to the date at which it is callable, meaning that a fall in interest rates will most likely cause early redemption of the bond at a premium.

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pickup bond

A bond with a relatively high coupon and a short period remaining until it is likely to be called by the issuer. If interest rates fall and the bond is called, the investor will pick up a premium equal to the difference between the call price and the purchase price.