call protection investment & finance definition
A
situation in which a bond or note cannot be redeemed by the issuer prior to a
certain date.
See call protection in Wall Street Words
The prohibition against an issuer's calling a bond from an investor during the early years of the security's life. Municipals and industrial bonds usually have ten years of call protection, while protection on utility debt is often limited to five years. A longer period of call protection is advantageous to the investor because calls nearly always occur during periods of reduced interest rates. Also called
cushion. See also
noncallable,
nonrefundable.
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