DEFINITION of 'Multi-Callable Bond'

A bond that allows the issuer to call or redeem it on particular future dates that are specified at the time of issuance. Since the issuer benefits by gaining flexibility with regard to the bond's maturity, the coupon on the bond may be higher than the prevailing market interest rate.

BREAKING DOWN 'Multi-Callable Bond'

Multi-callable bonds or notes are generally of two types - step-up notes or accrual notes. In multi-callable step-up notes, the coupon increases if the notes are not called by the issuer, while in accrual notes, the interest rate remains unchanged and accrues at a constant rate.

RELATED TERMS
  1. Reverse Convertible Bond - RCB

    A bond that can be converted to cash, debt or equity at the discretion ...
  2. Call Privilege

    The provision in a bond indenture that gives the bond issuer ...
  3. Coupon Bond

    A debt obligation with coupons attached that represent semiannual ...
  4. Callable Bond

    A bond that can be redeemed by the issuer prior to its maturity. ...
  5. European Callable Bond

    A bond that can be redeemed by the issuer at a predetermined ...
  6. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer ...
Related Articles
  1. Financial Advisor

    7 Questions to Consider Before Investing in Bonds

    There is a significant number of questions every investor, private or institutional, should consider before investing in bonds.
  2. Investing

    How Does A Bond’s Coupon Interest Rate Affect Its Price?

    All bonds come with a coupon interest rate, which is the fixed annual interest a bond pays.
  3. Investing

    Corporate Bonds: Advantages and Disadvantages

    Corporate bonds can provide compelling returns, even in low-yield environments. But they are not without risk.
  4. Investing

    Bond Call Features: Don't Get Caught Off Guard

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

    Risks To Consider Before Investing In Bonds

    Make sure you understand the risks associated with bonds before making an investment decision.
  6. Investing

    If I Buy A $1,000 10-Year Bond With A 10% Coupon, Will I Receive $100 Each Year?

    Investors can count on a fixed-income security paying them a certain amount of cash as long as the security is held until maturity and the issuer doesn’t default.
RELATED FAQS
  1. How does a bond's coupon interest rate affect its price?

    Find out why the difference between the coupon interest rate on a bond and prevailing market interest rates has a large impact ... Read Answer >>
  2. Why doesn't the price of a callable bond exceed its call price when interest rates ...

    A callable bond provides the issuer (borrowing entity) with an option to redeem the bond before its original maturity date. ... Read Answer >>
  3. Under what circumstances might an issuer redeem a callable bond?

    Understand why an interest rate drop usually compels bond issuers to redeem callable bonds and re-issue them at the new, ... Read Answer >>
  4. Why is my bond worth less than face value?

    Find out how bonds can be issued or traded for less than their listed face values, and learn what causes bond prices to fluctuate ... Read Answer >>
  5. Which factors most influence fixed income securities?

    Learn about the main factors that impact the price of fixed income securities, and understand the various types of risk associated ... Read Answer >>
Hot Definitions
  1. Run Rate

    1. How the financial performance of a company would look if you were to extrapolate current results out over a certain period ...
  2. Hard Fork

    A hard fork (or sometimes hardfork) is a radical change to the protocol that makes previously invalid blocks/transactions ...
  3. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  4. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  5. Zero Day Attack

    Zero Day Attack is an attack that exploits a potentially serious software security weakness that the vendor or developer ...
  6. Effective Tax Rate

    The average rate at which an individual or corporation is taxed. The effective tax rate for individuals is the average rate ...
Trading Center