Callable Bonds

August 26th, 2017 by Kara in

A type of bond that can be bought back by the issuer before it reaches its maturity date.  For this option, the issuer has to pay a higher interest rate on the bond.  Issuers would want to do this if interest rates in the market have dropped so they could buy back their bonds and refinance their debt at a lower interest rate to save money.

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