Sentences with phrase «issues callable bonds»

To take advantage of lower rates in the future, ABC issues callable bonds.

Some older 30 - year Treasuries may be callable five years before they mature, but the Treasury no longer issues any callable bonds.

For example, Company A issues callable bonds with an 8 % interest rate.

Not exact matches

A callable or redeemable bond is a bond that may be redeemed by the issuing company before the maturity date.

Primarily this would occur when there is a drop in interest rates — issuers often redeem the callable bond and issue another one at the new, lower interest rate.

Also, many corporate bonds are callable, meaning that they can be called in by the issuing company and redeemed on a fixed date.

For instance, a callable municipal bond is issued with a 6 % yield.

Call Risk Appears Limited for Preferreds Both preferreds and high yield bonds share call risk, though preferreds tend to have more callable issues.

If a company issues a «Callable Bond», it means that it can be redeemed by the Issuer (company) before the bond's maturBond», it means that it can be redeemed by the Issuer (company) before the bond's maturbond's maturity.

When rates drop to 6 %, the company calls the bonds, pays each investor his principal and a small call premium, and then issues new callable bonds with a 6 % interest rate.

So if Company XYZ's bonds are callable, and rates fall from 10 % to 3 %, Company XYZ will probably call the 10 % bonds and issue new bonds with a lower coupon.

A callable bond is worth less to an investor than a noncallable bond because the company issuing the bond has the power to redeem it and deprive the bondholder of the additional interest payments he'd be entitled to if the bond was held to maturity.

Similar issues arise for callable bonds in the American municipal, corporate, and government agency sectors.

High - yield bonds are typically issued with maturities of 10 years or less, and are callable after four to five years.

In the debt capital markets field, the team advised on the first issue by a South African insurer of callable bonds that qualified as secondary capital for the issuer.