Browse By Alphabet


Redeemable Bond

A bond which the issuer has the right to redeem prior to its maturity date, under certain conditions. When issued, the bond will explain when it can be redeemed and what the price will be. In most cases, the price will be slightly above the par value for the bond and will increase the earlier the bond is called. A company will often call a bond if it is paying a higher coupon than the current market interest rates. Basically, the company can reissue the same bonds at a lower interest rate, saving them some amount on all the coupon payments; this process is called "refunding." Unfortunately, these are also the same circumstances in which the bonds have the highest price; interest rates have decreased since the bonds were issued, increasing the price. In many cases, the company will have the right to call the bonds at a lower price than the market price. If a bond is called, the bondholder will be notified by mail and have no choice in the matter. The bond will stop paying interest shortly after the bond is called, so there is no reason to hold on to it. Companies also typically advertise in major financial publications to notify bondholders. Generally, redeemable bonds will carry something called call protection. This means that there is some period of time during which the bond cannot be called. also called callable bond. opposite of irredeemable bond or non-callable bond.

InvestorGuide

INVESTOR GUIDE

This Glossary is provided by www.InvestorWords.com.
http://www.investorwords.com
Copyright © 1997-2014 by WebFinance Inc. All Rights Reserved.

Stock Quotes

Market data is delayed at least 15 minutes.

Company Lookup
Report Data Issue

To contact , please visit . Company data is provided by Capital IQ. Please use this form to report any data issues.

Please enter your information in the following field(s):
Update Needed*

All data changes require verification from public sources. Please include the correct value or values and a source where we can verify.

Your requested update has been submitted

Our data partners will research the update request and update the information on this page if necessary. Research and follow-up could take several weeks. If you have questions, you can contact them at bwwebmaster@businessweek.com.