A municipal bond’s embedded call option allows the issuer of the bond to “call” (i.e., pay back) the debt at a date prior to the bond’s final maturity, which allows the issuer to reduce the cost of ...

Discover how negative convexity affects bond prices, key risks, and how to calculate it. Learn why mortgage and callable ...

The advance refunding of tax-exempt bonds with taxable bonds is the dominant activity in the municipal markets. This is the major driver of the increase in taxable volume. According to a recent report ...

Callable bonds are a type of bond that the issuer can “call” or redeem before the maturity date. The specifics vary from bond to bond, but callable bonds always have one thing in common — the issuer ...

A call provision allows bond issuers to repurchase their debt early. Explore how these provisions function in real estate financing and their potential benefits.

If a bond is "callable," it means that the issuer has the right to buy the bond back at a predetermined date before its full maturity date. The call could happen at the bond's face value, or the ...

When companies and governments issue bonds, they do so with a specific maturity date attached to the bond. For example, a five-year corporate bond will pay interest for five years before it’s ...

For example, to analyze a refunding proposal, we need to determine the cost of the outstanding and the refunding bonds on a present-value basis. Earlier this year, I showed that tax-exempt and taxable ...

Bond investors are used to studying features like yield, maturity and credit quality. But many municipal and corporate bonds throw a curve: a "call" feature that ends the income flow, adding a layer ...

When a government or corporation issues a bond, it does so with a specific par value and interest rate. Once in the market, those values don’t change; however, the value of a bond can change depending ...