No, this doesn't prevent your ex from calling you at 3 AM. It has to do with bond purchases.
Some bonds include a provision that makes them "callable." This clause allows the issuer to buy them back on certain pre-specified dates before the maturity date. Issuers put this in place as a protection against falling interest rates. Nobody wants to get stuck paying out a 7% bond when the prevailing rate has fallen to 4%. In this scenario, a callable bond could be repurchased by the issuer and then new bonds sold at the lower rate.
For purchasers, callable bonds are less valuable because you don't know you'll get the full interest rate you've been promised. They could get called in. Usually this means that the interest rate on these bonds has to be a little higher than the going rate, in order to compensate investors for the added call risk.
There's also call protection.
Call protection lives the fine print in the paperwork. When you buy a bond, this language protects the buyer from having the bond called in...for a period of time. A typical call protection bars issuers from calling in a bond during a time period soon after purchase. For instance, the issuer might have to wait at least five years before calling its bonds and issuing cheaper bonds.
Related or Semi-related Video
Finance: What is Forced Conversion?59 Views
Finance allah shmoop what is forced conversion Okay this is
forced conversion Yeah this is also forced conversion and so's
this Yeah that is the issuer of this particular bond
Like the company who borrowed money has the right as
described in the indenture to force you to convert the
bond either into and say twenty five shares of common
stock or something else Which sort of implies that a
stock price the over under price of breaking evens about
forty bucks a share takes you get that thousand dollars
divided by the twenty five shares Think it's you forty
bucks a share or the issuer or company who sold
the bond in the first place can simply call the
bond and force converted into cash for the small conversion
premium of ah two point five percent or that's twenty
five bucks in this thousand dollars par value bond So
in this sense essentially the break even Numbers actually 41
dollars a share not forty there because you get an
extra little premium bump there if they force you to
convert the bond or debt into equity Got it We'll
force conversion in a bond sense is usually something cos
do when they can either refinance the bond at cheaper
interest rates or are doing so well operationally that they
have enough cash Teo just retire their debt They call
it back They buy it back save the interest charges
and quick cash toe work doing something else Either way
it's usually weigh less painful than the other flavour of 00:01:30.926 --> [endTime] forced conversion
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