Put Bond

AAA

DEFINITION of 'Put Bond'

A bond that allows the holder to force the issuer to repurchase the security at specified dates before maturity. The repurchase price is set at the time of issue, and is usually par value.

INVESTOPEDIA EXPLAINS 'Put Bond'

Bondholders have the option of putting bonds back to the issuer either once during the lifetime of the bond (known as a one-time put bond), or on a number of different dates. Of course, the special advantages of put bonds mean that some yield must be sacrificed.

This type of bond is also known as a multimaturity bond, an option tender bond, a variable rate demand obligation (VRDO).

RELATED TERMS
  1. Bond

    A debt investment in which an investor loans money to an entity ...
  2. Par Value

    The face value of a bond. Par value for a share refers to the ...
  3. Convertible Bond

    A bond that can be converted into a predetermined amount of the ...
  4. Coupon Bond

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

    A bond that can be redeemed by the issuer prior to its maturity. ...
  6. Eurobond

    A bond issued in a currency other than the currency of the country ...
RELATED FAQS
  1. What does it mean when a bond has a put option?

    A put option on a bond is a provision that allows the holder of the bond the right to force the issuer to pay back the principal ... Read Full Answer >>
  2. How can the yield curve help me make investment decisions?

    The yield curve is a graphical representation of the relationship between interest rates and the time to maturity of a group ... Read Full Answer >>
  3. What does the Macaulay duration indicate about a bond?

    The Macaulay duration measures the present value weighted average maturity for a bond. It describes how sensitive a bond’s ... Read Full Answer >>
  4. How do I convert a spot rate to a forward rate?

    Think of the relationship between spot and forward rates in the same way as the relationship between discounted present value ... Read Full Answer >>
  5. What is Z-spread and option adjusted credit spread?

    A zero-volatility spread, or Z-spread, uses the zero-coupon rate curve to calculate the spread between assets of different ... Read Full Answer >>
  6. What is the difference between yield to maturity and holding period return yield?

    If an investor purchases a bond and holds it until maturity, his return will be equal to the yield to maturity (YTM). On ... Read Full Answer >>
Related Articles
  1. Retirement

    Bond Basics Tutorial

    Investing in bonds - What are they, and do they belong in your portfolio?
  2. Mutual Funds & ETFs

    Is the DSUM Yuan Fixed Income ETF a Good Bet?

    An an depth look at PowerShares Chinese Yuan Dim Sum Bond ETF and its risks.
  3. Mutual Funds & ETFs

    Top Foreign Debt ETFs & Funds for Diversification

    Foreign fixed income options for investors seeking capital preservation and diversification
  4. Investing Basics

    What is a "Coupon"?

    In the financial world, “coupon” represents the interest rate on a bond.
  5. Stock Analysis

    Is it Time to Buy Floating Rate Bonds?

    The Fed’s awaited interest rate hike could finally be at hand. Are floating rate bonds the way to go?
  6. Investing Basics

    What's the Primary Market?

    The primary markets are where investors can get first crack at a new security issuance.
  7. Investing Basics

    Explaining the Coupon Rate

    Coupon rate is the stated interest rate on a fixed income security.
  8. Retirement

    Facing Retirement? Look Beyond 100% Bonds

    Retiring doesn't mean putting all your money in bonds. There are two things to consider when it comes to be invested in bonds: growth and inflation.
  9. Professionals

    Beware: These Bond Funds Act Like Stocks

    Beware of bond funds that act like stocks.
  10. Investing

    Three Portfolio Moves To Consider Now

    What portfolio moves should you consider making as the 2nd quarter kicks off? Before we focus on the future, let’s first reflect on the 1st Q surprises.

You May Also Like

Hot Definitions
  1. Standard Error

    The standard deviation of the sampling distribution of a statistic. Standard error is a statistical term that measures the ...
  2. Capital Stock

    The common and preferred stock a company is authorized to issue, according to their corporate charter. Capital stock represents ...
  3. Unearned Revenue

    When an individual or company receives money for a service or product that has yet to be fulfilled. Unearned revenue can ...
  4. Trailing Twelve Months - TTM

    The timeframe of the past 12 months used for reporting financial figures. A company's trailing 12 months is a representation ...
  5. Subordinated Debt

    A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known ...
  6. International Financial Reporting Standards - IFRS

    A set of international accounting standards stating how particular types of transactions and other events should be reported ...
Trading Center