Glossary of Municipal Securities Terms

CALL PROTECTION

The aspects of the redemption provisions of an issue of callable bonds that partially protect an investor against an issuer’s prepayment of the bonds prior to maturity or act as a disincentive to the issuer’s exercise of its call privileges. These features may include restrictions on an issuer’s right to call bonds for a period of time after issuance (for example, an issue that cannot be called for ten years after its issuance is said to have “ten years of call protection” or “ten-year no-call”) or requirements that an issuer pay a premium call price for bonds called within a certain period of time after issuance. See: PREMIUM CALL PRICEREDEMPTION PROVISIONS.

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