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Call Protection

What is a 'Call Protection'

A call protection is a protective provision of a callable security prohibiting the issuer from calling back the security for a period early in its life.

Explaining 'Call Protection'

The call protection is advantageous to investors because it prevents the issuer from forcing redemption early on in the life of a security. This means that investors will have a minimum number or years, regardless of how poor the market becomes, to reap the benefits of the security.


Further Reading


Interest rate uncertainty and the value of bond call protection
www.journals.uchicago.edu [PDF]
… and finance, Boston University School of Management, and associate professor of economics, Harvard University … market provides bonds with substantially longer formal call protection; the call option on most long … Et(V +1) equals the linear com- bination of the known call price Ct …

Agency costs and alternative call provisions: An empirical investigationAgency costs and alternative call provisions: An empirical investigation
www.jstor.org [PDF]
… and finance, Boston University School of Management, and associate professor of economics, Harvard University … market provides bonds with substantially longer formal call protection; the call option on most long … Et(V +1) equals the linear com- bination of the known call price Ct …

Convertible bond design and capital investment: The role of call provisionsConvertible bond design and capital investment: The role of call provisions
onlinelibrary.wiley.com [PDF]
… and finance, Boston University School of Management, and associate professor of economics, Harvard University … market provides bonds with substantially longer formal call protection; the call option on most long … Et(V +1) equals the linear com- bination of the known call price Ct …

Probe into the Aspect of Sequential Finance and Design of Convertible Bond of Call ProvisionsProbe into the Aspect of Sequential Finance and Design of Convertible Bond of Call Provisions
en.cnki.com.cn [PDF]
… and finance, Boston University School of Management, and associate professor of economics, Harvard University … market provides bonds with substantially longer formal call protection; the call option on most long … Et(V +1) equals the linear com- bination of the known call price Ct …

An empirical examination of call option values implicit in US corporate bondsAn empirical examination of call option values implicit in US corporate bonds
www.jstor.org [PDF]
… and finance, Boston University School of Management, and associate professor of economics, Harvard University … market provides bonds with substantially longer formal call protection; the call option on most long … Et(V +1) equals the linear com- bination of the known call price Ct …

High-yield bond default and call risksHigh-yield bond default and call risks
www.mitpressjournals.org [PDF]
… and finance, Boston University School of Management, and associate professor of economics, Harvard University … market provides bonds with substantially longer formal call protection; the call option on most long … Et(V +1) equals the linear com- bination of the known call price Ct …

Social protection and disability: a call for actionSocial protection and disability: a call for action
www.tandfonline.com [PDF]
… and finance, Boston University School of Management, and associate professor of economics, Harvard University … market provides bonds with substantially longer formal call protection; the call option on most long … Et(V +1) equals the linear com- bination of the known call price Ct …

An empirical comparison of published replication research in accounting, economics, finance, management, and marketingAn empirical comparison of published replication research in accounting, economics, finance, management, and marketing
www.sciencedirect.com [PDF]
… and finance, Boston University School of Management, and associate professor of economics, Harvard University … market provides bonds with substantially longer formal call protection; the call option on most long … Et(V +1) equals the linear com- bination of the known call price Ct …

… sovereignty/Exploring collaborations: Heterodox economics and an economic social rights framework/Workers in the informal sector: Special challenges for economic …… sovereignty/Exploring collaborations: Heterodox economics and an economic social rights framework/Workers in the informal sector: Special challenges for economic …
www.tandfonline.com [PDF]
… and finance, Boston University School of Management, and associate professor of economics, Harvard University … market provides bonds with substantially longer formal call protection; the call option on most long … Et(V +1) equals the linear com- bination of the known call price Ct …

Was the Asian crisis a wake-up call?: Foreign reserves as self-protectionWas the Asian crisis a wake-up call?: Foreign reserves as self-protection
www.sciencedirect.com [PDF]
… and finance, Boston University School of Management, and associate professor of economics, Harvard University … market provides bonds with substantially longer formal call protection; the call option on most long … Et(V +1) equals the linear com- bination of the known call price Ct …



Q&A About Call Protection


Why would an investor want to have this provision?

Because it prevents the issuer from forcing redemption early on in the life of a security. This means that investors will have a minimum number or years, regardless of how poor the market becomes, to reap the benefits of the security.

What is Call Protection?

Call protection is a protective provision of a callable security prohibiting the issuer from calling back the security for a period early in its life.

How does this benefit investors?

It allows them to reap more benefits and not be forced into selling at an unfavorable time.

Who provides these protections?

The issuer provides these protections by including them in their contracts with investors.

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