Noncallable

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Noncallable

A preferred stock or bond that cannot be redeemed whenever desired by the issuer.

Noncallable

A security that the issuer cannot redeem before maturity.

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.

Noncallable.

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.

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References in periodicals archive ?

The model presented in this paper argues that an entrant can use noncallable convertible debt to avoid predation in entry deterrence games.

The strategic use of convertible debt in "deep pocket" predatory games

This price-process model is identical to the one used by Murphy (1991), except that implied volatility is used to estimate the variation in noncallable debt values whereas historical variance was used in the 1991 study because implied volatility figures did not exist in the pre-1984 portion of that study's sample.

A comparative analysis of the price-process model of mortgage valuation

The values of Treasury securities are often summarized by the yield curve, which plots the yields of all noncallable securities against their maturities.

The Treasury Securities Market: Overview and Recent Developments

Perhaps the best way to understand the impact of including a call option on a municipal bond is to look at the value of a callable bond as if it were the value of a noncallable bond minus the value of the embedded call.

Analysis of the Call Feature on Municipal Debt

Because the callability feature introduces bias in the risk premium of a subordinated debt, this study used only noncallable debt risk premium.

A methodological investigation of risk exposure of bank off-balance sheet loan commitment activities

CallProtection is equal to one for noncallable convertibles, which constitute 21.80% of the sample.

Do convertible bond issuers cater to investor demand?

At the 5-year maturity, there were only two noncallable securities with close to 5 years remaining to maturity, so those two rather than three securities were used to measure yields at that maturity.

Let's twist again: a high-frequency event-study analysis of operation twist and its implications for QE2

(39) Fixed-rate, noncallable, semiannual coupon, long-term (ten-to-twenty-year) bonds were the most commonly issued instruments during the sample period.

A reconsideration of the risk sensitivity of U.S. banking organization subordinated debt spreads: a sample selection approach

The fraction of public bonds that are callable is the number of callable public bond issues outstanding divided by the total number of callable and noncallable public bond issues outstanding.

The influence of firm maturation on tax-induced financing and investment decisions

The study focused exclusively on newly issued, noncallable debt securities with maturities greater than one year.

Financing housing through government-sponsored enterprises

The qualifying subordinated debt would be 5-year, noncallable, fixed rate debt, and there would be a minimum of two issues a year, with the two qualifying issues being at least two months apart.

Reforming bank capital regulation: Using subordinated debt to enhance market and supervisory discipline

These are noncallable securities issued on a regular basis in larger sizes than the agencies' typical issues.

ALTERNATIVES TO TREASURY SECURITIES

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