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Bonds/Are All Bonds Callable?

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Expert: Doug Ingram - 7/23/2006


Question
Can bonds that are not callable be called in? Is there some circumstance where any bond can be called in early?  

Answer
Bonds are only callable if they are issued with call features which clearly state the dates and prices of each call (it can be continous after a certain date or have an event like a one-time only call).
The issuer has to pay the buyer a higher rate to have the option to call a bond.  An issuer will usually only call a bond if the debt can be reissued at a cheaper rate net of banker fees.

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Doug Ingram

Expertise

Fixed income portfolio allocation and strategies for institutional investors. Having designed multi-scenario risk quantification and cash flow projection models for nearly 25 years, Strategic Technical Initiatives can answer your regulatory, SFAS 115 allocation, securities selection, and other questions dealing with yield curve placement and portfolio mix strategies. I write the Bond Market Review on behalf of Commerce Street Capital Management.

Experience

Trading and designing portfolio strategies since 1980.

Education/Credentials
Physics and Differential Mathematics

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