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Callable Security

 
Accounting Dictionary: Callable Security

Bond or preferred stock issue with a Call Provision. The provision in the indenture or preferred stock agreement allows an issuing company to redeem the security early. When interest rates are expected to decline, a call provision in the bond issue is desirable from an issuer's standpoint. Such a provision enables the firm to buy back the high-interest security and issue a lower-interest one. See also Call.

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Accounting Dictionary. Dictionary of Accounting Terms. Copyright © 2005 by Barron's Educational Series, Inc. All rights reserved.  Read more