P has affirmed "that agreement in principle on the terms of a proposed restructuring has been reached with certain of its main lenders and an ad hoc group of bondholders in its NOK 700 million Senior Unsecured Callable Bond
Issue 2013/2016 (ISIN NO 001 0673866).
He said that ORPIC took out its deposit for the contract which was set aside as a form of callable bond
If they had issued a callable bond
, the market would have demanded a higher initial interest rate.
The company also noted that the subsidiary Chapter 11 filing will likely constitute an event of default under the loan agreement in respect of the NEC convertible callable bond
issue 2012/2015 (ISIN NO 001064079.
The majority of the company's bondholders have made commitments to vote for the conversion of the accumulated interest and principal on the company's 2009 and FRN 2009 callable bond
issues into shares at a price of NOK0.
In light of the dramatic changes in the callable bond
market, we reexamine the determinants of callable bonds
Since the investor faces the risk of an uncertain stream of cash flows, the common market practice is to demand a higher yield in a callable bond
than in a non-callable bond
in order to compensate the higher risk caused by the embedded call options in a specific issue.
In a world without inflation, default-free callable bond
yields would be readily available from GNMA ("Ginnie Mae") pass-through mortgage-backed securities (MBS).
The chart at the lower left takes a common callable bond
, the 30-year Government National Mortgage Association bond, and subtracts, as an estimate of inflation, the yield difference between a 10-year Treasury bond and a 10-year TIIS.
The following section will discuss how the value (and yield) of a callable bond
differs from a noncallable bond.
A callable bond
permits an issuer to retire its debt prior to maturity.
Norse Energy said that Chapter 11 filing by its subsidiary will likely constitute an event of default under the loan agreement in respect of the NEC convertible callable bond