Definitions for "Callable Bonds"
Keywords:  redeem, issuer, par, maturity, bond
A bond which the issuer can decide to redeem before its stated maturity date. A call date and a call price are always given. You face a risk with a callable bond that it will be redeemed if its stated coupon is higher than prevailing rates at the time of its call date. If that happens, you won't be able to reinvest your capital in a comparable bond at as high a yield.
Bonds that companies may repay (call) prior to scheduled maturity dates. Companies usually pay interest penalties when buying back these bonds.
Bonds that give the issuer the right to redeem the bonds before their stated maturity.