Who Issued Callable Bonds?

Companies issue callable bonds to allow them to take advantage of a possible drop in interest rates in the future. The issuing company can redeem callable bonds before the maturity date according to a schedule in the bond's terms.

Who calls a callable bond?

Callable or redeemable bonds are bonds that can be redeemed or paid off by the issuer prior to the bonds' maturity date. When an issuer calls its bonds, it pays investors the call price (usually the face value of the bonds) together with accrued interest to date and, at that point, stops making interest payments.

What is a callable bond and why are they issued?

A callable bond, also known as a redeemable bond, is a bond that the issuer may redeem before it reaches the stated maturity date. A callable bond allows the issuing company to pay off their debt early.