call premium

Popular Terms
Amount above the par value of a bond that its issuer must pay to the holders if the bond is redeemed before its maturity date. Call premium usually declines with the years of the bond's issue date; it is higher for bonds called after 5 years than for those called after 10 years. It compensates the bond holder for disruption in interest earnings, and for the effort to reinvest funds.


Email Print Embed