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 redemption premium, also known as a call premium, is the amount over the par value that a bond issuer must pay an investor if the security is redeemed early.
Senior refunding refers to the process of replacing securities maturing in 5 to 12 years with issues that have original maturities of 15 years or longer. Objectives can include reducing the bond issuer's interest costs, consolidating several issues into one, or extending the maturity date.
