Redemption


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Redemption

Repayment of a debt security or preferred stock issue, at or before maturity, at par or at a premium price.

Redemption

1. In bonds, the act of an issuer repurchasing a bond at or before maturity. Redemption is made at the face value of the bond unless it occurs before maturity, in which case the bond is bought back at a premium to compensate for lost interest. The issuer has the right to redeem the bond at any time, although the earlier the redemption take place, the higher the premium usually is. This provides an incentive for companies to do this as rarely as possible.

2. The act of the issuing company repurchasing stocks or mutual funds. In the case of mutual funds, the repurchase is made at net asset value per share. Stocks may be redeemed in cash or by proration. See also: Proratable factor.

redemption

The retirement of a security by repurchase. Although generally used in reference to the repurchase of a bond before maturity, the term also applies to stock and mutual fund shares. See also partial redemption.

Redemption.

When a fixed-income investment matures, and you get your investment amount back, the repayment is known as redemption.

Bonds are usually redeemed at par, or face value, traditionally $1,000 per bond. However, if a bond issuer calls the bond, or pays it off before maturity, you may be paid a premium, or a certain dollar amount over par, to compensate you for lost interest.

You can redeem, or liquidate, open-end mutual fund shares at any time. The fund buys them back at their net asset value (NAV), which is the dollar value of one share in the fund.

References in periodicals archive ?
Basic is the rule that the right to redeem becomes functus officio on the date of its expiry, and its exercise after the period is not really one of redemption but a repurchase.
As of 31 May 2019, the total number of shares amounts to 71,792,620, of which 35,896,310 are ordinary shares and 35,896,310 are redemption shares.
This press release shall not constitute a notice of redemption of the Notes.
Planning tip: In most cases, a redemption that qualifies for sale treatment will be preferable to one taxed as a dividend.
The aforesaid decision was taken in light of the practical difficulties faced by companies regarding utilization of the redemption reserve.
Redemption was not intended to be a school for misfits.
It seemed clear that redemption is communal, not a solo activity.
The Federal Reserve Board on September 23, 2004, announced that it has revised its Policy Statement on Payments System Risk concerning interest and redemption payments on securities issued by government-sponsored enterprises (GSEs) and certain international organizations.
has called for the redemption of the Company's remaining outstanding 7 5/ 8% Series A convertible cumulative preferred stock on October 15, 2004, at a redemption price of $25.7625 per share of Series A preferred stock, plus accumulated and unpaid dividends to the Redemption Date of $0.3918 per share.
Piracy, Slavery, and Redemption makes available to scholars and students seven complete annotated narratives of early modern Englishmen who were "delivered" from captivity and enslavement under North African Muslims.
At that time, the Commission amended Regulation S-X to modify the financial statement presentation of preferred stocks subject to mandatory redemption requirements or whose redemption is outside the control of the issuer.
The Feast of the World's Redemption: Eucharistic Origins and Christian Mission.