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Related to Non-Callable: Call protection, Call provision


A preferred stock or bond that cannot be redeemed whenever desired by the issuer.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


A security that the issuer cannot redeem before maturity.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

noncallable (NC)

A provision of some bond and preferred stock issues that prohibits the issuer from redeeming the security before a certain date, or, in some cases, until maturity. A noncallable provision operates to the advantage of the investor. Compare nonrefundable.
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.


When a bond is noncallable, the issuer cannot redeem it before the stated maturity date. Some bonds have call protection for their full term, and others for a fixed period -- often ten years.

The appeal of a noncallable bond is that the issuer will pay interest at the stated coupon rate for the bond's full term. In contrast, if a bond is called, you receive a lump-sum repayment of principal, which you must reinvest.

Frequently, rates are lower at call that they were when the bond was issued, which means your reinvested principal will provide a smaller yield.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
The Reserve Bank of India (RBI) has allowed banks to offer non-callable deposits, fixed-tenure deposit schemes where premature withdrawal is not allowed.
The subordinated sukuk, an Islamic bond based on the Islamic principle of Musyarakah, has a tenure of 10 years from the issue date on a 10 non-callable five basis.
A complete discussion is beyond the scope of this article, but I would like to make an important point about bonds with embedded options or call features, and non-callable bonds.
The company priced the senior unsecured notes at 98.545 to yield 9.125 percent and deemed them non-callable for five years.
One of the banks working on the KCA deal said the bonds will mature in 2018 and be non-callable for four years.
In this study, the authors test whether callable bonds have lower agency costs of debt than non-callable bonds.
Of the five, Corporate America and Corporate Central have even raised paid-in capital from members, getting a head start on proposed NCUA regulations that will likely increase the required ratio of non-callable, GAAP-approved PIC to moving average assets.
Also, the notes are usually non-callable for a period (2-3 years typically) during which time an investor should receive the stated distributions and the company is prohibited from "calling in" the note and repaying all the capital owed.
They were non-callable for the first four or five years, then became callable at a premium that declined to par by maturity.
By selecting non-callable securities, we ensure that our bonds have positive convexity and can maximize gains.
where k and CF are defined as above, [r.sub.0.sup.c] is the current callable risk-free rate with the maturity of the final cash flow of the project, and [r.sub.0] is the current duration-matched non-callable risk-free rate.

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