Callable Bond

A callable bond gives the issuer the right, under the bond’s terms, to redeem the bond before its stated maturity date.

A simple example

A bond due in 2035 may permit the issuer to redeem it at a stated price beginning in 2030.

Why this matters to income investors

An issuer may call a bond when refinancing is attractive, ending the investor’s interest stream earlier than expected and creating reinvestment risk.

How to use callable bond in your research

Review the first call date, call price, call protection, yield to call, yield to maturity, and yield to worst.

This material is general education and information, not individualized investment, tax, or legal advice.