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.

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.

References in periodicals archive ?
Year 2006 Benchmark Notes(R) Issuance Calendar January February March April Announcement Announcement Announcement Announcement Optional 2-, 3-, 5-, 10-Year Notes 13th 10th 10th 17th May June July August Announcement Announcement Announcement Announcement Optional 2-, 3-, 5-, 10-Year Notes 12th 9th 14th 11th September October November December Announcement Announcement Announcement Announcement Optional 2-, 3-, 5-, 10-Year Notes 8th 13th 13th 13th Benchmark Notes -- Minimum new issue size for noncallable Benchmark Notes (2 to 10 years in maturity) is US$3.
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.
The mean coupon rate for the noncallable sample is greater than that for the callable sample (10% and 8.
In 2005, Fannie Mae will continue to utilize predefined monthly calendar dates for the announcement, pricing, and settlement of noncallable Benchmark Notes.
0 billion Noncallable Benchmark Notes(R) -- Minimum new issue size for noncallable Benchmark Notes (2 years - 10 years in maturity) is US$3.
Callable zeroes, however, will not experience the same price appreciation as noncallable zeroes due to the negative price impact of the call option.
Indeed, BT state that "the greater is the probability of default, the more new investment tends to 'bail out' the bondholders and hence the more noncallable debt tends to weaken the investment incentive" (page 1193).
Fannie Mae may periodically engage in buybacks of outstanding noncallable Benchmark Securities in 2004, except for on-the-run 2-, 3-, 5- and 10-year maturity securities.
Section II provides a numerical analysis of straight noncallable corporate and Treasury bonds.
The 'AAApre' rating reflects this pledge and that all funds have been invested in direct noncallable obligations of the Federal Home Loan Mortgage Corporation.
1) Since the call premium is taxed as a capital gain to investor, but is deductible as an ordinary income expense to the firm, they concluded that the expected tax benefit for a callable bond will be higher than for an otherwise identical but noncallable bond.
The notes have a seven-year term and will be noncallable for the first four years.