call protection

Call protection

A feature of some callable bonds that establishes an initial period when the bonds may not be called.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Call Protection

A provision in callable bonds that prevents the bond from being called for a certain period of time. Interest payments are guaranteed during the call protection period but not afterward. The bond may be prematurely redeemed at any point after the call date. Call protection exists to protect bondholders from the risk that interest rates will fall before the call date. The period of time during which the bond cannot be called is often called the cushion.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

call protection

The prohibition against an issuer's calling a bond from an investor during the early years of the security's life. Municipals and industrial bonds usually have ten years of call protection, while protection on utility debt is often limited to five years. A longer period of call protection is advantageous to the investor because calls nearly always occur during periods of reduced interest rates. Also called cushion. See also noncallable, 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.
References in classic literature ?
"I was hidden behind that door," he said, "which leads into the next house, which I have rented." Valentine turned her eyes away, and, with an indignant expression of pride and modest fear, exclaimed: "Sir, I think you have been guilty of an unparalleled intrusion, and that what you call protection is more like an insult."
Hiya, the industry provider of nuisance and scam call protection, along with the FCC, is warning consumers not to fall victim to the latest phone scam, the Wangiri -- or "one ring" -- scam, which is rapidly back on the rise in the US, the company said.
Core earnings have been solid and have demonstrated superior consistency compared to the peer group, given the stronger credit track record and the call protection embedded in deals.
That was because loan investors get very little "call protection": Borrowers are free to call their loans early and refinance them, and they were doing so with lower coupons as demand exploded.
The presence of strong call protection, call premium, orboth signal high likelihood of a call while, weak call protection, call at par, orboth signal weak likelihood of a call (Tewari et al.
The new credit facility will mature in three years, will be issued at an original issue discount of 1%, will carry a floating interest rate of LIBOR plus 6.75% (subject to a 1% LIBOR floor) and will be subject to call protection.
"But police are regularly collecting Bhatta, to which they call protection money for their services they render to us and of which we are unaware" was the unanimous reply from traders, informing the beater of Aram Bagh police station - Arif Hussain - is collecting the amount daily.
That's what we call protection 4U, protection for your instruments.
The amendment increases flexibility under the total leverage ratio covenant, increases the interest rate payable with respect to outstanding loans under the facility by 1.5%, and provides for certain changes to the excess cash flow mandatory prepayment and call protection provisions under the facility.
Defeasance is the preferred form of call protection for fixed-rate conduit/commercial mortgage-backed securities (CMBS) loans.
However, some strips are issued with call protection to assure investors that the bond will not be called for a specified period or not at all.