Callable Bond

A callable bond is a bond with provision that allows it to be reissued at a lower interest rate in the future. A high interest rate bond with a callable provision can be called and reissued at a lower internet rate. Many junk bonds use this provision when their bond rating improves and the bond can be reissued at a lower interest rate. Macy’s recently called a bond to lower their interest rate obligations. The transaction with Macy,s will complete on August 28.