Скачать или смотреть Yield to Call (callable bonds) - What is the definition - Finance Dictionary

For callable bonds investors are interested in the yield to call. This is because if interest rates fall below the coupon rate of the bond then the firm is likely to repurchase the bond and issue new bonds at lower interest rates. Callable bonds have a protection period where they cannot be repurchased however there is also sometimes an implicit form of call protection for bonds that are selling at deep discounts below their call price. If this is the case then even if interest rates drop a firm might not call the bond because their call price is more than the bond's market value so calling the bonds would not be beneficial to the firm. Bonds that are selling at a premium compared to their call price are much more likely to be called, therefore investors that hold premium bonds are much more interested in the yield to call than the yield to maturity. The yield to call is calculated the same as the yield to maturity is calculated except the time to call replaces the time to maturity and the call price replaces the par value. If a bond's call protection expires 3 years from today and the yield to maturity is 10 years then we would use 3 years for the time period to calculated the yield to call and the time to maturity to calculate the yield to maturity.
   / subjectmoney  
   • Yield to Call (callable bonds) - What is t...