Extraordinary Redemption

Filed Under »
Dictionary Says

Definition of 'Extraordinary Redemption'

A provision that gives a bond issuer the right to call its bonds due to an unusual one-time occurrence, as specified in the offering statement. Extraordinary redemptions, also called "extraordinary calls," occur when bond proceeds aren't spent according to schedule, when bond proceeds are used in a way that makes nontaxable bond interest taxable, or when a catastrophe destroys the project being financed, among other reasons.
Investopedia Says

Investopedia explains 'Extraordinary Redemption'

There are two types of extraordinary redemptions: extraordinary mandatory redemptions and extraordinary optional redemptions. Some municipal bonds are issued with an extraordinary redemption provision. An extraordinary redemption means the issuer pays the holder the bond's face value plus accrued interest. A more common circumstance under which a bond would be called, assuming it is provided for in the offering statement, is a drop in interest rates that allows the issuer to refinance its project by issuing new bonds at a lower rate.

Articles Of Interest

  1.

    When Your Bond Comes Calling

    Callable bonds can leave investors with a pile of cash in a low-interest market. Find out what you can do about it.

  2. Callable Bonds: Leading A Double Life

    Find out more about these dangerous and exciting cousins to regular bonds.

  3. 5 Basic Things To Know About Bonds

    Learn these basic terms to breakdown this seemingly complex investment area.

  4. Top 4 Strategies For Managing A Bond Portfolio

    Find out how these strategies work and how you can put them to work for you.

  5. Bond Call Features: Don't Get Caught Off Guard

    Learn why early redemption occurs and how to avoid potential losses.

  6. Common Bond-Buying Mistakes

    Avoid these errors made daily in bond portfolios everywhere.

  7. Bond Basics Tutorial

    Investing in bonds - What are they, and do they belong in your portfolio?

  8. Why Your Pension Plan Has Sovereign Debt In It

    One type of security pensions tend to invest in is sovereign debt, or debt issued by a government.

  9. 6 Popular ETF Types For Your Portfolio

    Exchange traded funds are an extremely popular diversification tool that can protect your portfolio during troubled periods.

  10. Top 5 Budgeting Questions Answered

    You don't need a degree to understand your money, begin saving and pay down debt.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Xenocurrency

    A currency that trades in markets outside of its domestic borders.

  2. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.

  3. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.

  4. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.

  5. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.

  6. Chartalism

    A non-mainstream theory of money that emphasizes the impact of government policies and activities on the value of money.
Trading Center
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=4f0f21d3313b304b6dc4580e06ca423d