Redeemable Bond

Redeemable Bond

A bond that the issuer may buy back from investors before maturity. The bond may be called at the discretion of the issuer, within certain limits. When the bond is called, the bondholder receives the par value (or sometimes slightly more) and does not receive any more coupons. Redeemable bonds are issued to allow the issuers to hedge against interest rate risk. That is, if interest rates fall significantly, they can call the bond and issue a new bond at a lower interest rate, reducing their liabilities. However, to protect the bondholder, most redeemable bonds also include call protection, which prevents the bonds from being called for a certain period of time and thereby guarantees the current interest rate for that time. A redeemable bond is also called a callable bond.
References in periodicals archive ?
1 Calculating the internal rates of return for Kite's redeemable bond Time [pounds Discount Present Discount Present sterling] factors at value at factors at value at a discount 8% a discount 10% rate of 8% rate of 10% Year 0 (100) 1.000 (100.00) 1.000 (100.00) Years 1-5 1 3.993 3.99 3.791 3.79 Year 5 150 0.681 102.15 0.621 93.15 6.14 (3.06)
The yield of a redeemable bond equals the internal rate of return (IRR) of the bond price, the annual interest received and the final redemption amount.
As with irredeemable bonds, the price of redeemable bonds can fluctuate over time.
VIDC will fund the project from the proceeds of secured non-convertible redeemable bonds. After much delay the project was granted environment clearance (EC) to Maharashtra and Adilabad district of Telangana in May 2015.
The bank said the unsecured, redeemable bonds carry a coupon rate of 8.42 percent.
As part of the new arrangements, the Welsh Government will be able to issue redeemable bonds on the international bond market to institutional investors, governments, traders and individuals.
Secured Redeemable Bonds -- Series I Tranche I 164.7 'CARE A' (Single A) Retained
Proposed Secured Redeemable Bonds -- Series I Tranche II 17.0 'CARE A' (Single A) Revalidated
15 February 2011 - RAM Ratings reiterated on Monday the AA1 ratings with a "stable" outlook assigned to the MYR2bn (USD656.3m/EUR485.6m) commercial papers/medium-term notes programme (CP/MTN) and MYR2.2bn serial redeemable bonds of Malaysian company YTL Power International Berhad (KUL:YTLPOWR), YTLPI.
13 August 2010 - India's ICRA said it assigned an LAAA rating to the INR23.45bn (USD501.8m/EUR390.7m) non-convertible redeemable bonds programme of local power generation firm NTPC Ltd (BOM:532555).