Multi-Callable Bond


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.

  1. Accrual Rate

    The rate of interest that is added to the principal of a financial ...
  2. Call Provision

    A provision on a bond or other fixed-income instrument that allows ...
  3. Callable Bond

    A bond that can be redeemed by the issuer prior to its maturity. ...
  4. Step-Up Bond

    A bond that pays an initial coupon rate for the first period, ...
  5. Yield To Call

    The yield of a bond or note if you were to buy and hold the security ...
  6. U.S. Savings Bonds

    A U.S. government savings bond that offers a fixed rate of interest ...
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