Bonds that can be redeemed at par at the option of their holders either at specific date after the date of issue and every 1 to 5 years thereafter or when and if the firm takes specified actions such as being acquired, acquiring another company, or issuing a large amount of additional debt are called ________.

Question

Quizplus · Accepted Answer

Putable bonds give the holder the option to redeem the bond at par value before maturity under certain conditions, such as the ones mentioned in the question. The other options listed – zero coupon bonds, junk bonds and floating-rate bonds – do not have the same put options.

Bonds That Can Be Redeemed at Par at the Option