extraordinary redemption

Extraordinary Redemption

A situation in which a bond issuer redeems a bond before its maturity because the revenue source paying the coupons disappears. For example, suppose a callable bond is issued to build a factory, and the revenue from the factory pays the interest on the bond. If the factory burns down, the company may redeem the bond at par so it no longer has to make interest payments. While the above example is catastrophic, most extraordinary redemptions occur for more mundane reasons; for instance, a mortgage-backed security may be extraordinarily redeemed if too many mortgages are refinanced. An extraordinary redemption is also called a special call.

extraordinary redemption

References in periodicals archive ?
A failed remarketing will cause an early termination of the Prepaid Commodity Sales Agreement and the extraordinary redemption of the bonds.
But aside from purely strategic and structural issues, the philosophy behind Mueller's vision is probably best expressed by this passage in his lineup statement: "Orphans of certainties and truths, cinema has adopted us, offering us an extraordinary redemption: the feeling of being able to belong in this world ....
A failed remarketing will cause an early termination of the Gas Purchase Agreement and the extraordinary redemption of the bonds.

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