A call date refers to the date specified in a bond or other debt instrument when the issuer has the option to redeem or call back the security before its maturity date.
No, the issuer can only exercise the call option on or after the specified call date mentioned in the bond or debt instrument.
If the issuer exercises the call option, they will redeem the bond or debt instrument before its maturity date, usually at a predetermined price or premium.
In some cases, the call date can be extended or changed if both the issuer and the bondholders agree to the modification. However, this is subject to the terms and conditions outlined in the bond or debt instrument.
The penalties for exercising the call option, such as prepayment penalties or fees, depend on the terms and conditions specified in the bond or debt instrument. It is essential to review the document to understand the applicable penalties.
Unless specified otherwise in the bond or debt instrument, bondholders generally cannot refuse the issuer’s exercise of the call option on the call date.
Yes, the issuer can choose to call back only a portion of the outstanding bonds if the terms and conditions allow for partial redemption. This is known as a partial call.
If the issuer does not exercise the call option on the call date, the bond or debt instrument will continue to remain outstanding until its maturity date, subject to the terms and conditions specified in the document.
Yes, bondholders can sell their bonds before the call date in the secondary market, subject to market conditions and investor demand. The price at which the bonds are sold may be influenced by factors such as prevailing interest rates and the bond’s call features.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 4th April 2024.
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