Soft call protection and Specific performance: Difference between pages

Revision as of 10:20, 10 November 2013

Law.

An order made by a court requiring a party in breach of contract to perform his obligations under that contract.

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-A weak form of protection for lenders/investors in securities, designed to mitigate the adverse effects of call risk for investors.
+''Law.''
-Soft call protection requires the payment of a premium to the investor, on any early redemption of a callable bond by the borrower/issuer.
+An order made by a court requiring a party in breach of contract to perform his obligations under that contract.
-The premium is usually small - for example 0.5% or 1% of the principal per annum - over the remaining life at early redemption.
-At early redemption the premium becomes payable, together with principal and outstanding interest at the call/redemption date.
+== See also ==
+* [[Breach of contract]]
+* [[Injunction]]
+* [[Rescission]]
+* [[Damages]]
-A 1% premium is often referred to as ''101 call protection''.
+[[Category:Regulation_and_Law]]
-It 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 soft call protection).
-== See also ==
-* [[Call risk]]
-* [[Hard call protection]]
-* [[Soft]]