Fairfax Virginia Investment-Grade Bond Optional Redemption (without a Par Call) A Fairfax Virginia Investment-Grade Bond Optional Redemption (without a Par Call) is a type of bond issued by the government of Fairfax, Virginia, with an investment-grade rating. This type of bond provides investors with the option to redeem the bond before its maturity date, typically without requiring the payment of a premium, known as a par call. Investment-grade bonds are highly regarded for their low default risk and are typically issued by governments or corporations with strong credit ratings. These bonds are considered relatively safe investments, attracting investors seeking a balance between stability and income. The optional redemption feature allows bondholders to redeem their bonds before the agreed-upon maturity date, providing them with liquidity and the opportunity to reinvest their funds at potentially higher interest rates or to react to changing market conditions. This flexibility is a key factor for investors, as it enables them to adjust their investment portfolio based on their financial goals and market outlook. By excluding a par call provision, this specific type of Fairfax Virginia bond does not require bondholders to pay an additional premium when exercising the redemption option. This means investors can redeem their bonds at their face value without incurring any extra costs. The absence of a par call provision provides more favorable terms for bondholders, enhancing the attractiveness of these bonds in the market. In some cases, there may be variations of Fairfax Virginia Investment-Grade Bond Optional Redemption (without a Par Call) based on different features or terms. These variations could include differences in interest rates, maturity dates, or call provisions. Investors interested in these bonds should carefully review the specific terms and conditions before making any investment decisions to ensure they align with their financial objectives and risk tolerance. In summary, Fairfax Virginia Investment-Grade Bond Optional Redemption (without a Par Call) offers investors a secure and flexible investment option with the potential for liquidity before maturity. These bonds come with an investment-grade rating and provide a reliable income stream, making them an attractive choice for conservative investors seeking stable returns.
Fairfax Virginia Investment - Grade Bond Optional Redemption (without a Par Call)
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FAQ
Some high yield bonds are issued with even shorter non-call periods, and some investment grade bonds are issued with a non-call period that extends for the entire life of the bonds (such bonds are referred to as non-call life).
A callableredeemablebond is typically called at a value that is slightly above the par value of the debt. The earlier in a bond's life span that it is called, the higher its call value will be. For example, a bond maturing in 2030 can be called in 2020. It may show a callable price of 102.
Over the past several years, par calls (at a price of 100% of the principal amount of the debt being redeemed plus accrued and unpaid interest) near the end of maturity have been relatively standard in investment grade utility debt. The duration of the par call varies depending on the tenor of the debt.
callable bond is a bond that is only paid out at maturity. The issuer of a noncallable bond can't call the bond prior to its date of maturity.
Make-Wholes Generally Such provisions allow parties to agree in advance on a measure of damages for such prepayment. Lenders use make-wholes to lock in a guaranteed rate of return on their investment at the time they agree to provide the financing.
A partial call is when securities are redeemed for cash by the issuer prior to the maturity date of the instrument. Callable securities include bonds and preferred stocks. The issuer will announce the record date of the call at which time holders of settled positions may become subject to the call.
"Par Call Date" means (the date that is three months prior to the maturity date of the notes).
whole call provision is a type of call provision on a bond allowing the issuer to pay off remaining debt early. The payment is derived from a formula based on the net present value (NPV) of previously scheduled coupon payments and the principal that the investor would have received.
Callable or redeemable bonds are bonds that can be redeemed or paid off by the issuer prior to the bonds' maturity date. When an issuer calls its bonds, it pays investors the call price (usually the face value of the bonds) together with accrued interest to date and, at that point, stops making interest payments.
What Is Noncallable? Noncallable security is a financial security that cannot be redeemed early by the issuer except with the payment of a penalty. The issuer of a noncallable bond subjects itself to interest rate risk because, at issuance, it locks in the interest rate it will pay until the security matures.