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Canary Call

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Dictionary Says

Definition of 'Canary Call'

A step-up bond that cannot be called after completing its first-step period. The issuer of the bond reserves the option to call back the bond until the first step is reached. A canary call may only be exercised on predetermined dates.
Investopedia Says

Investopedia explains 'Canary Call'

The canary call is similar to a Bermuda option, as it must be called on specific dates. If the issuer of the bond chooses not to call before the canary call expires, the bond will remain a standard step-up bond, where the coupon rate will increase with each step-up period.

Related Definitions

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    Step-Up Bond

    A bond that pays an initial coupon rate for the first period, and then a higher coupon rate for the following periods.
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  • Bermuda Option

    A type of exotic option that can be exercised only on predetermined dates, typically every month. Bermuda options are a combination of American and European options. American options are ...
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    • Coupon

      The interest rate stated on a bond when it's issued. The coupon is typically paid semiannually. This is also referred to as the "coupon rate" or "coupon percent rate".
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