PAYS CALL Meaning and
Definition
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Pays call is a finance term denoting the act of repurchasing a security or derivative contract before its maturity or expiration, usually at a predefined price or premium. This action is typically executed by the issuer or seller of the security or contract. It enables the issuer to terminate or redeem the investment instrument, relieving them of further obligations associated with it.
Pays call occurs when conditions are favorable for the issuer, allowing them to buy back the security. These conditions may include a decline in interest rates, resulting in a lower cost of borrowing, or a rise in the issuer's financial health, enabling them to obtain funds at a more favorable rate.
The option to pay call is often embedded in bonds or certain types of contracts as a provision to protect the issuer's interests. This provision grants the issuer the right, but not the obligation, to repurchase the security early. However, the call feature is typically beneficial to the issuer, as it allows them to refinance debt at a lower interest rate or redeem an underperforming or risky investment.
Investors should be aware of the possibility of a pays call as it affects their investment strategy. If a security they hold is subject to a call feature, they may face early redemption or the need to reinvest the funds received at potentially less favorable terms. Understanding the characteristics and potential implications of pays call provisions allows investors to assess the risks and rewards associated with certain investments.
Common Misspellings for PAYS CALL
- payes call
- pais call
- oays call
- lays call
- -ays call
- 0ays call
- pzys call
- psys call
- pwys call
- pqys call
- pats call
- pags call
- pahs call
- paus call
- pa7s call
- pa6s call
- payz call
- payx call
- payw call
- pays xall
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