Soft Call Provision


DEFINITION of 'Soft Call Provision'

A feature added to convertible fixed-income and debt securities. The provision dictates that a premium will be paid by the issuer if early redemption occurs.

BREAKING DOWN 'Soft Call Provision'

A sweetener added to increase securities' attractiveness, a soft call provision acts as an added restriction for issuers should they decide to redeem the issue early.

  1. Bond

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

    A legal clause or condition contained within a contract that ...
  3. Convertible Bond

    A bond that can be converted into a predetermined amount of the ...
  4. Compound Accreted Value - CAV

    A measure of the theoretical value of a zero-coupon bond at any ...
  5. Sweetener

    A special feature or benefit added to a debt instrument (such ...
  6. Hard Call Protection

    The period in the life of a callable bond during which the issuing ...
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