call protection

Call protection

A feature of some callable bonds that establishes an initial period when the bonds may not be called.

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.

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.
References in classic literature ?
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.
75% (subject to a 1% LIBOR floor) and will be subject to call protection.
The credit facility has a favorable rate of LIBOR+700 basis points (L+700 bps) and contains covenant-lite terms and minimum call protection, providing the greatest flexibility for the company to consider its future options.
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.
5%, and provides for certain changes to the excess cash flow mandatory prepayment and call protection provisions under the facility.
5%, and provide 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.
TRADING standards officers are warning people to be wary of businesses offering cold call protection - by cold calling.
13) Percentage of Years of Call Protection is the percentage of years that the call protection is in effect.
Generally (keeping the call protection period constant), the longer the maturity, the greater the option value as there is more opportunity for interest rates to decline to permit profitable exercise.