A call provision allows the corporation to retire a bond before maturity by paying a small discount below par value.

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A call provision allows the corporation to call or force in all of the debt issue prior to maturity. The corporation usually pays a 3-5% premium over par value as part of the call provision arrangement. The ability to call is often deferred for the first 5 or 10 years of an issue (it can only occur after this time period).

A Call Provision Allows the Corporation to Retire a Bond