Making Sense of the Make-Whole Call, From Its Origins to BABs

Kalotay, Andrew
July 2010
Bond Buyer;7/26/2010, Vol. 373 Issue 33355, p31
Trade Publication
In this article the author discusses the make-whole call, a type of call provision on a bond that permits borrowers to pay off remaining debt early in the U.S. He believes the importance of a brief historical perspective in appreciating the works of the provision which has become commonplace for taxable bonds, including municipal Build America Bonds (BABs). He states that discounts on the remaining cash flows are important in obtaining a make-whole price.


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