Meaning & use
callable bonds
Last updated
“callable bonds” is a form of “callable bond”.
Meaning
nounpluralfinance
Bonds that the issuer has the right to pay back and cancel before their official maturity date.
Grammar: Plural form of callable bond: investors hold callable bonds.
Patterns
- call a bond
- invest in callable bonds
The city issued callable bonds so it could refinance if rates dropped.
Callable bonds often pay a higher yield to make up for the risk of early repayment.
Investors dislike callable bonds when interest rates are falling.
Word forms
| singular | callable bond |
|---|
Common combinations
- issue callable bonds
- The company issued callable bonds last spring.
- buy callable bonds
- Retirees often buy callable bonds for the extra yield.
- call the bonds
- The issuer decided to call the bonds early.
- callable bonds price
- The callable bonds price dropped after the announcement.
Synonyms and how they differ
- redeemable bonds
- This is a close alternative, though redeemable may refer to either side's right to repay.
- bonds with a call feature
- A longer phrase that means the same thing, and appears in contracts.
- early redemption bonds
- It highlights the early repayment but is not the standard market term.
Opposites
Word family
Commonly confused: callable bonds or convertible bonds?
callable bonds vs convertible bonds
These can be swapped for shares in the company, whereas callable bonds can be repaid early by the issuer.
Practice
Who has the right to end the bond early with callable bonds?
Choose one answer.
The issuer holds the call right, which is why it is called callable. Investors have no such right unless the bond is puttable.
Make it your own
Write a sentence using “callable bonds”, then check it and compare it with the examples above.