Which term is used to describe a call provision in which the issuer is prevented from calling a portion or the entire issue for several years during the early years of the bond issue?
Saturday, March 02, 2024
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Question: Which term is used to describe a call provision in which the issuer is prevented from calling a portion or the entire issue for several years during the early years of the bond issue?
A call provision is a clause in a bond contract that gives the issuer the right to redeem the bond before its maturity date. A call provision may have a deferred call period, which is a specified number of years during which the issuer cannot call the bond. This period is also known as a call protection period, because it protects the bondholder from losing the bond's interest payments and principal amount before the expected maturity date.
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