Investopedia

Continue to Site »

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. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  2. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  3. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  4. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  5. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  6. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
Trading Center