Call provision
Call provision is a provision that gives the issuing corporation the right to call the bonds for redemption. The call provision generally states that if the bonds are called then the company must pay the bondholders an amount greater than the par value, or a call premium. Most bonds contain a call provision.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Call provision. Gives the issuing corporation the right to call the bonds for redemption. The call provision generally states that if the bonds are called then the company must pay the bondholders an amount greater than the par value, or a call premium. Most bonds contain a call provision.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Call provision. A provision in a bond contract that gives the issuer the right to redeem the bonds under specified terms prior to the normal maturity date.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
