101 call protection

From ACT Wiki
Jump to navigationJump to search
The printable version is no longer supported and may have rendering errors. Please update your browser bookmarks and please use the default browser print function instead.

Security investment.


A form of soft call protection for lenders/investors in securities, designed to mitigate the adverse effects of call risk for investors.

101 soft call protection requires the payment of a 1% premium to the investor, on any early redemption of a callable bond by the borrower/issuer.


At early redemption the premium becomes payable, together with principal and outstanding interest at the call/redemption date.

The premium sometimes applies only for an early part - for example just the first year - of the life of a security (the security becoming freely callable after that initial period of 101 call protection).


See also