Canary Call definition explanation

What is Canary Call?
A step-up bond that cannot be called after completing its first-step period. The issuer of the bond reserves the option to call back the bond until the first step is reached. A canary call may only be exercised on predetermined dates. Read more for examples and further explanation including related video clips and also comments

Example explains Canary Call
The canary call is similar to a Bermuda option, as it must be called on specific dates. If the issuer of the bond chooses not to call before the canary call expires, the bond will remain a standard step-up bond, where the coupon rate will increase with each step-up period.

[tubepress mode='tag', tagValue='Canary Call invest']