If an issuer has the right to pay off a bond before its maturity, the bond is

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If an issuer has the right to pay off a bond before its maturity, it is called callable. This means that the issuer can redeem or call back the bond from the bondholder before its actual maturity date. This option is usually written in the bond's prospectus, and the issuer can exercise the option if the interest rates have fallen or if the issuer wants to issue new debt at a lower interest rate.

If an Issuer Has the Right to Pay Off a Bond