Module 2 · Chapter 4

Redemption: Maturity, Early Calls and the Change of Control Put

A bond is repaid on a fixed day, but the terms can end it sooner. The issuer can repay early at a price, and holders can demand their money after a takeover.

≈ 10 min read 8-question test

In this chapter

  • How the Notes are repaid in one sum, and why that means refinancing
  • The three ways Valkenrade can repay early, and the price of each
  • When a takeover lets each holder demand repayment

4.1Redemption in one paragraph

Redemption means repaying the Notes, and Condition 6 says when and at what price. Normally every Note is repaid on one day in 2033, but four rights can end the Notes sooner. Valkenrade has three calls (rights to repay early). Each holder has one put (a right to demand repayment).

Key point

Valkenrade chooses three of the early endings, and the holders choose one. Each is at par, except the make-whole call, which can cost more than par.

Also in this chapter

  1. Maturity: one repayment in 2033
  2. The make-whole call
  3. The par call in the last three months
  4. The tax call
  5. The change of control put
  6. The four early endings side by side
  7. Your job

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