Explaining the Concept of Hard Call Protection
Hard call protection is a term used in the fixed income market to describe a provision that protects bondholders from having their bonds called or redeemed by the issuer before the maturity date. This protection is put in place to provide investors with a certain level of security and stability.
Hard call protection is designed to mitigate this risk for bondholders. It sets a specific period of time during which the bond cannot be called by the issuer. This period is usually stated in the bond’s prospectus and can range from a few years to the full term of the bond.
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