Callable Puttable Bonds Debentures Bond Refunding
Beginning from 1992 when the Industrial Development Bank of India issued bonds with call features, several callable/puttable bonds have emerged in the country in recent years. The call provisions provide flexibility to the company to redeem them prematurely. Generally, firms issue bonds presumably at lower rate of interest when market conditions are favourable to redeem such bonds. In other words, the firm refunds its debt.