Call risk: Difference between revisions
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imported>Administrator (CSV import) |
imported>Doug Williamson m (Spacing) |
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The risk to a lender/investor from the potential calling - for early redemption - of a callable bond. | The risk to a lender/investor from the potential calling - for early redemption - of a callable bond. | ||
It gives the investor the unexpected problem of re-investing their money returned early. | It gives the investor the unexpected problem of re-investing their money returned early. | ||
So if interest rates have fallen the investor will receive a lower than expected return, for the unexpired term of the original (callable) bond. | So if interest rates have fallen the investor will receive a lower than expected return, for the unexpired term of the original (callable) bond. | ||
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* [[Soft call protection]] | * [[Soft call protection]] | ||
* [[Spens clause]] | * [[Spens clause]] | ||
Revision as of 04:47, 3 August 2013
The risk to a lender/investor from the potential calling - for early redemption - of a callable bond. It gives the investor the unexpected problem of re-investing their money returned early.
So if interest rates have fallen the investor will receive a lower than expected return, for the unexpired term of the original (callable) bond.
