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.

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References in periodicals archive ?
The noncallable bond coupon payment C, which satisfies Equation (3), at a par value of B = 100, is computed to be 15.
Valuation of callable bonds under progressive personal taxes and interest rate uncertainty
The model-generated credit spreads are compared to observed at-issue credit spreads of both make-whole call and noncallable bonds in Section IV.
What is the cost of financial flexibility? Theory and evidence for make-whole call provisions
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
For the price-process model, the volatility of default-free, noncallable debt prices is assumed to be proportional to maturity (Murphy, 1991), and the implied volatilities on 30-year debt are estimated by applying the Black (1976) option pricing model to the nearest-to-the-money call options on the second nearest CBT T-bond futures contract listed in the Wall Street Journal on each GNMA pricing date.
A comparative analysis of the price-process model of mortgage valuation
where CB is the value of a callable bond, NCB is the value of a noncallable bond, and OVB is the option value of the embedded call.
Analysis of the Call Feature on Municipal Debt
The risk-free rates of Treasury securities identical in maturity to each BHC noncallable debt were collected from Moody's Bond Records.
A methodological investigation of risk exposure of bank off-balance sheet loan commitment activities
This translates to an upper bound in the market value of the underlying noncallable bond, which would limit the benefit of increased volatility.
Do Nonrefunding Provisions Constrain Corporate Behavior? Evidence from Calls
Callable zeroes, however, will not experience the same price appreciation as noncallable zeroes due to the negative price impact of the call option.
Risks in new agency structure
For noncallable bonds, the premium is amortized over the bond's life.
Tax aspects of municipal bonds
To control for term effects and market movements not associated with the call,(5) we selected a matched-control sample of independent noncallable bonds with a maturity date on or immediately following the call date.
Valuation process and market efficiency for US Treasury bonds
Securities are defined as common stock and noncallable convertible preferred stock.
Using ESOPs to solve succession problems

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