doubling option

Doubling option

A sinking fund provision that may allow repurchase of twice the required number of bonds at the sinking fund call price.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Doubling Option

A provision in some bond indentures allowing the issuer to repurchase up to twice the number of bonds specified in the indenture's sinking fund provision. That is, the doubling option allows the issuer to redeem a large number of bonds prematurely. The redemption occurs at face value, or close to it. The issuer usually exercises the doubling option when interest rates are low and it can re-issue the same bonds at less expense to itself. The doubling option reduces the return for investors.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

doubling option

A provision in some indentures that allows the borrower, at his or her option, to retire twice as many bonds as stipulated under a sinking fund requirement. The additional retirements take place at or near par, so that the option is used during periods of low interest rates. Thus, the provision operates to the disadvantage of investors. Compare sinking fund provision. See also call provision.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
'Quite simply, whilst there was the doubling option on the table, there was no way I was ever going to turn that opportunity down.
The exceptions are Rupp, an automatic qualifier in the 10K, who is entered in the 1,500 and 5,000 to keep his NCAA doubling options open; sophomore Jamesha Youngblood in the women's triple jump and long jump; and Warren, a sophomore, who is seeded ninth in the long jump and 11th in the high jump.