call premium

call premium definition - finance
A premium that bond issuers must pay to purchasers of their callable bonds to compensate them for the fact that the bonds may be called before maturity and the bondholders may not receive as much interest over the life of the bond as anticipated. The call premium is the amount above the value at maturity that the issuer must pay to the bondholder for possibly calling the bond.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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