A call feature allows the issuing corporation to repay the bond prior to maturity if it so wishes.

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A call feature, also known as a redemption feature, allows the issuing corporation to repay the bond prior to maturity if it chooses to do so. This gives the issuer the flexibility to take advantage of lower interest rates or to refinance the bond at more favorable terms. However, the call feature can potentially work against bondholders who may have expected to receive interest payments for the entire duration of the bond.

A Call Feature Allows the Issuing Corporation to Repay the Bond