NONCALL Meaning and
Definition
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Noncall can be defined as a term primarily used in finance and investment banking to refer to a specific type of bond or security that cannot be redeemed or called back by the issuer for a predetermined period of time. This means that during this period, the issuer does not have the ability to repay the principal amount or end the bond prematurely.
Noncall securities are typically issued with longer maturities and offer a higher interest rate compared to callable bonds. By eliminating the possibility of early redemption, noncall bonds provide investors with a measure of certainty and stability, as they can rely on a fixed income stream until the maturity date.
The noncall provision is usually established by the issuer to protect against unfavorable market conditions that may arise after the bond is issued. In such cases, if interest rates or market conditions change favorably for the issuer, they could potentially refinance the debt at lower interest rates, leaving the bond investors with a lower return.
However, it is worth noting that noncall bonds may still have certain conditions under which they can be redeemed before maturity, such as default or bankruptcy. These conditions are typically outlined in the terms and conditions of the bond's indenture agreement.
Overall, the noncall provision serves as a safeguard for investors by providing a guaranteed income stream for a specified period of time, shielding them from any potential negative impact arising from the issuer's ability to terminate the bond prematurely.
Common Misspellings for NONCALL
- boncall
- moncall
- joncall
- honcall
- nincall
- nkncall
- nlncall
- npncall
- n0ncall
- n9ncall
- nobcall
- nomcall
- nojcall
- nohcall
- nonxall
- nonvall
- nonfall
- nondall
- nonczll
- noncsll
Etymology of NONCALL
The word "noncall" is a compound word derived from two parts: "non-" and "call".
1. "Non-" is a prefix derived from the Latin word "non", meaning "not" or "negation". It is often used in English to form words that indicate negation, absence, or negation of a certain quality.
2. "Call" is a noun that originated from the Old Norse word "kall", meaning "a loud cry" or "a summons". Over time, it developed various meanings, including a telephone communication, a decision made by an official in sports, or a request for something to happen.
When these two parts are combined, "noncall" is formed, typically referring to a situation where a call or decision is not made, or a request goes unanswered or unacknowledged.
