redeem

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Redemption

1. In bonds, the act of an issuer repurchasing a bond at or before maturity. Redemption is made at the face value of the bond unless it occurs before maturity, in which case the bond is bought back at a premium to compensate for lost interest. The issuer has the right to redeem the bond at any time, although the earlier the redemption take place, the higher the premium usually is. This provides an incentive for companies to do this as rarely as possible.

2. The act of the issuing company repurchasing stocks or mutual funds. In the case of mutual funds, the repurchase is made at net asset value per share. Stocks may be redeemed in cash or by proration. See also: Proratable factor.

redeem

(1) In mortgages, to cure a default by paying all past-due sums and penalties after receiving notice of default, but before acceleration. (2) To exercise the post-foreclosure right of redemption, if allowed. (3) Under federal law, the IRS has 120 days after foreclosure to purchase property on which it had a lien—to redeem the property. (It rarely does this,and would only do so if it believed it could sell the property at a profit large enough to justify the time and trouble.)

References in periodicals archive ?
Shares redeemed pursuant to the 2013 Redemption Offer have a single USD net asset value based upon exchange rates at the relevant date.
44 Series, with 249,850 outstanding shares, which will be redeemed for $101.
The proposed regulations had set forth a general rule that, in any case in which the amount received in a redemption was treated as a dividend, the basis for the redeemed stock would not shift to other shares owned by the redeemed shareholder, or to shares owned by another person whose stock ownership would be attributed to the redeemed shareholder.
Even then, fewer than 2 percent of coupons were redeemed, reflecting the attitude among many consumers that the chore of clipping and redeeming coupons is not worth the effort.
Series M7 - 640 shares, rated 'AAA', redeemed on May 18, 2010.
301(c)(2), if the distribution exceeds E&P, it is a return of capital up to the shareholder's basis in the redeemed stock.
In 1988, Moriah redeemed Joann's stock; she reported a capital gain on her 1988 tax return.
On or after the Redemption Date interest on the Debentures called for Redemption will cease to accrue (in the case of a partial redemption of a Debenture, interest will cease to accrue on the redeemed principal amount thereof) and all rights of the holders with respect to the Debentures to be redeemed in full with cease except the right to receive the Redemption Price and accrued interest.
In a corporate redemption, the transaction is normally treated as an exchange under Interal Revenue Code section 302(b)(3), which covers transactions in which the redeemed shareholder's proprietary interest in the corporation is completely terminated.
Characterization as a complete redemption allows the redeemed shareholders to fully use their stock basis to recover a portion of the corporate distribution as a tax-free return of investment.
80 to purchase one Common Share at any time until September 29, 1996, unless earlier redeemed.