If market interest rates are below the bond's coupon rate on a call date, the issuer is more likely to choose to redeem the bond. Once the bond is redeemed, the investor has to reinvest the proceeds at lower rates.
Callable bond
- Japanese
- コーラブル債
- Last reviewed
- September 25, 2026
This is a draft, shown for review before publication.
A callable bond is a bond whose issuer holds the right (a call) to redeem it before maturity on dates and at a price set in advance. In return for selling this right to the issuer, the investor receives a higher coupon rate than on an otherwise identical bond with no call feature.