A callable bond, also referred to as a redeemable bond, is a type of debt security that permits the issuer to repurchase the bond from the bondholder before its scheduled maturity date at a predetermined price, known as the call price.
This feature provides the issuer with flexibility to capitalize on lower interest rates or to refinance the debt if market conditions change. Callable bonds usually offer higher yields to offset the risk of early redemption for investors.
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