Special Call

special call

See extraordinary call.

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Special Call

A situation in which a bond issuer redeems a bond before its maturity because the revenue source paying the coupons disappears. For example, suppose a callable bond is issued to build a factory and the revenue from the factory pays the interest on the bond. If the factory burns down, the company may redeem the bond at par so it no longer has to make interest payments. While the above example involves a disaster, most special calls occur for more mundane reasons; for instance, a mortgage-backed security may be specially called if too many mortgages are refinanced. A special call is also called an extraordinary call.