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Repayment / Pre-payment Provisions

Bullet Bonds: Lump sum at maturity, pays entire principal.

Serial Bonds: Pay- off principal through series of payments over time.

Amortizing Securities: Periodic principal & interest payments.

Sinking Fund: Provisions for bond retirement through pre-defined principal payments over life of the issue.

Call Provisions: Issuer has right (but not obligation) to retire all or part of issue prior to maturity. Issuer owns option to call the bonds away from investor.

Non-refundable Bonds: Prohibit premature retirement of an issue from proceeds of a lower coupon bond. Bonds that carry these provisions can be freely callable but nonrefundable.

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