callable

Understanding the Callable Bond Feature A callable bond feature permits the issuer of a bond—usually a corporation, municipality, or government agency—to redeem the outstanding security before its scheduled maturity date. When a bond includes this option, it is referred to as a callable bond. The call feature is

Introduction to Callable Bonds A callable bond, sometimes called a redeemable bond, is a fixed-income security that allows the issuer to repay the principal before the scheduled maturity date. This embedded call option gives companies and municipalities flexibility, while offering investors a potentially higher yield to compensate for early-redemption uncertainty.