Bond call price

A bond call price is the contractually-mandated price at which a bond holder must sell a bond back to the issuer. This call price is stated in the bond indenture. The bond issuer usually triggers the call option when interest rates decline; this presents an opportunity for the issuer to replace the bonds with ones that have a lower interest rate.

An example of a bond call price is a requirement for the issuer to pay 108% of the par value of a bond if it calls the bond.

Related Courses

Accounting for Investments 
Corporate Finance 
GAAP Guidebook