A call feature or call provision is part of the agreement a bond issuer makes with a buyer, detailing the schedule and price of redemptions before maturity. Most corporate and municipal bonds have ten-year call features, while government securities usually do not.
The call price is the price at which a bond or a preferred stock with a call feature can be redeemed by the issuer prior to its maturity date. It is also known as the redemption price.
A callable security can be redeemed by the issuer before its scheduled maturity date, usually triggering a necessity for extra payment to the holder, identified as a call premium.
The redemption price is the predetermined value at which a bond or preferred stock can be repurchased or redeemed by the issuer before its maturity date, commonly referred to as the call price.
