call provision

Definition

A clause in a bond's indenture granting the issuer the right to buy back all or part of an issue prior to the maturity date.

Use call provision in a sentence

You may need to add a call provision that will allow you greater flexibility in the future for your business.

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The muni bonds lacked a call provision; indeed, the investors knew that if they were signing on, the fledgling city needed them to hold the securities until maturation.

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The portfolio manager was left scrambling for an income replacement, after the issuer of the 7% bond exercised his call provision and redeemed his highest-coupon position.

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high-coupon bond refunding provision