call feature

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Call feature

Part of the indenture agreement between the bond issuer and buyer describing the schedule and price of redemptions prior to maturity.

Call Feature

A provision in an indenture that makes a bond callable. A callable bond allows the issuer to redeem the bond before maturity. When the bond is called, the bondholder receives the par value (or sometimes more) and does not receive any more coupons. Callable bonds are issued to allow the issuers to hedge against interest rate risk. That is, if interest rates fall significantly, the issuers can call the bond and issue a new bond at a lower interest rate, reducing their liabilities. However, to protect the bondholder, most callable 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.

call feature

References in periodicals archive ?
Users can utilize WhatsApp video and voice call features for as low as Rs.
WORLDWIDE COMPUTER PRODUCTS NEWS-November 30, 2015-Turkcell adds voice and video call features on its BiP app
Staff will be involved with tax-loss harvesting, monitoring the portfolio for credit changes and monitoring interest rate changes that could affect income streams due to the embedded call features in individual portfolios.
He or she invents a security that typically has a 10-year nominal horizon but some special put and call features two years out.
According to agency theories, call features may offer advantages to both issuers and investors by solving conflicts between stockholders and bondholders.