Soft Call Provision

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Compound Accreted Value - CAV

    A measure of the theoretical value of a zero-coupon bond at any ...
  2. Convertible Bond

    A bond that can be converted into a predetermined amount of the ...
  3. Hard Call Protection

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

    A debt investment in which an investor loans money to an entity ...
  5. Sweetener

    A special feature or benefit added to a debt instrument (such ...
  6. Provision

    A legal clause or condition contained within a contract that ...
Related Articles
  1. Bonds & Fixed Income

    Advanced Bond Concepts

  2. Retirement

    Bond Basics Tutorial

  3. Bonds & Fixed Income

    What determines the price of a bond ...

  4. Bonds & Fixed Income

    How long will it take for a bond to ...

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center