Retractable bond (putable bond, put bond)

Updated: Aug 20, 2021

A bond with a put option which gives the holder a right to force the payment of the principal by the issuer of losses for the bond holder related to rising interest rates, ootential loss of the issuer’s ability to repay, or adverse situation in the secondary markets. For this reason retractable bonds will sell at a premium relative to a similar debt security without the put option.

Reference: Oxford Press Dictonary of Economics, 5th edt.

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James Knight
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James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.