The Call Provision

A bond with early redemption provisions is essentially a portfolio consisting of a conventional bond having the same coupon and maturity and a put or call option on this bond. The value of the bond is the sum of the values of these portfolio elements. This is expressed formally as (11.1). 

For a conventional bond, the value of the option component is zero. For a putable one, the option has a positive value. The portfolio represented by a putable bond contains a long position in a put, which, by acting as a floor on the bond s price, increases the bond s attractiveness to investors. Thus the greater the value of the put, the greater the value of the bond. This is expressed in (11.2). 

A callable bond is essentially a conventional bond plus a short position in a call option, which acts as a cap on the bonds price and so reduces its value. If the value of the call option were to increase because of a fall in interest rates, therefore, the value of the callable bond would decrease. This is expressed in (11.3). 

The difference between the price of the option-free bond and the callable bond at any time is the price of the embedded call option. The behavior of the option element depends on the terms of the callable issue. 

If the issuer of a callable bond is entitled to call it at any time after the first call date, the bondholder has effectively sold the issuer an American call option. However, as figure 11.1 illustrates, the redemption value may vary with the call date. This is because the value of the underlying bond at the time the call is exercised is composed of the sum of the present values of the remaining coupon payments that the bondholder would have received had the issue not been called. Of course, the embedded option does not trade on its own. Nevertheless, it is clear that embedded options influence significantly not only a bonds behavior but its valuation as well. 

Thus the greater the value of the put, the greater the value of the bond. This is expressed in (11.2). 

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The call schedule works like this. If market interest rates rise after the bonds are issued, ABC Corp. gains, because it is incurring below-market financing costs on its debt. If rates decline, investors gain, because the value of their investment rises. Their upside, however, is capped at the applicable call price by the call provisions, since the issuer will redeem the bond if it can reduce its funding costs by doing so. 

Bodie, Z., and R. Taggart. 1978. Future Investment Opportunities and the Value of the Call Provision on a QonA. Journal of Finance 33, 1187-2000. 

Narayanan, M. P., and S. P. Lim. 1989. On the Call Provision on Corporate Zero-Coupon Bonds. Journal of Financial and Quantitative Analysis 24, March, 91-103. 

FIGURE 11.10 The Binomial Price Tree for the Hypothetical 3-Year 6 Percent Bond, lenorinp the. Call Provision ... 

Compare the so-called soft (i.e., widely distributed small sources) and hard (i.e., fewer very large sources) paths for the future provision of energy for light, heat, and power. 

In 1967, Council Directive 67/548/EEC (EEC 1967), the so-called 67-Directive, was adopted in order to approximate the national provisions relating to dangerous substances. The Directive introduced common provisions on the classification of dangerous chemical substances to ensure the establishment of a common market in the field of such substances and a high level of protection of human health. The 67-Directive is permanently updated to take account of the scientific and technical progress in the field of dangerous substances. Until today it has been amended 9 times and adapted to technical progress 29 times. 

The latter deadline is set nearly 20 years after the ministerial call for a new chemicals policy in the EU. Above 10 t, a Chemical Safety Report with data on a relatively large set of parameters, including data on intrinsic properties, exposure scenarios and risk management measures, is to be included in the registration (Article 14, Annex 1). For substances in quantities of 1-10 t, a technical dossier with more basic data (Article 10) is stated to be sufficient. Concerning so-called non-phase-in substances , i.e. basically those not being produced or marketed before REACH, the registration provisions entered into force on 1 June, 2008 (Article 141). 

The revisionists also acted as pioneers in terms of expert criticism of testimony and documents as well as in the call for and provision of material evidence. 

A bond is simply a long-term promissory note. It is a contract established between borrower and lender in a document called an indenture. A bond indenture includes a detailed description of assets that are pledged, together with any protective clauses and provisions for redemption. A trustee is appointed to look after the interest of the bondholders. The trustee is normally a commercial bank. Bonds may be issued with a call provision that enables a company to redeem its bonds at any date earlier than scheduled. Obviously, this would be an advantage to a company in times of falling interest rates. However, a company has to pay more than the par value of the bond for this privilege. The additional amount is called the bond premium. 

There has been extensive professional discourse on the roles and responsibilities of pharmacists. Experiences of early clinical pharmacists paved the way for expanded professional responsibility. Pharmaceutical care emerged as a call for the responsible provision of drug therapy for achieving definite outcomes that improve a patient s quality of life. The experiences of pharmacists seeking to incorporate this philosophy into everyday practice have led to the definition of a pharmaceutical care practice as one in which the practitioner takes responsibility for all of a patient s drug-related needs and is held accormtable for this commitment. 

Are they really preparing this list I m beginning to wonder. It has been over a year and a half since the MCA was enacted yet this Special Surveillance list has not yet been made. No lab company knows what the hell I m talking about when I mention this. No DEA official knows about this list. I know because I called every one of the twenty-one Field Diversion offices on the nation. In fact I had to literally explain to the agents what the MCA provision was in the first place. Only one agent, a lady in the New Orleans division had heard about it. She says it was not in existence. Well, when it is, I will expose it. Meanwhile, all of you citizens should press the DEA hard for this list especially you lab store owners. 

It may also be said that the establishment of the federal-state UI system by the SSA amounted to activation of the states by the Federal Government to deal with the social problem of unemployment. When the original provisions of the SSA were being debated, it was unclear whether the US Supreme Court would accept that a federal power could establish a national UI system or whether such an action would be considered unconstitutional. Lawmakers anticipated the latter, thus developing a concept to enable States to establish separate state unemployment insurance programmes - the so-called Federal-State Partnership. 

Title I of the CAA Amendments of 1990 contains many new and revised requirements for areas that have not attained the national ambient air quality standards (NAAQS) for ozone, carbon monoxide, particulate matter, sulfur dioxide, nitrogen dioxide, and lead. The EPA developed a guidance document, called the General Preamble to Title I (2), to assist States regarding the interpretation of the various provisions of Title I, as amended. A Supplement to the General Preamble was subsequently published (3) and provides guidance on implementation of Title I NO, provisions. This section of the paper focuses on the Title I requirements related to the ozone NAAQS. 

To identify the correct person to whom the letter should be addressed, the EPA regional office should be called to ask the name of the person who handles self-reported violations under the ERP appUcable to the TSCA provision that has potentially been violated. 

The committee is encouraged by the recent provisions of Presidential Decision Directive 63 that call for establishing a national center to warn owners and operators of critical economic and governmental infrastructures of terrorist threats. We hope that as the details of this center are developed, the medical community will not be overlooked. To enhance communication to and within the national medical community, the following R D needs have been identified ... 

Some bonds include a provision in their offer particulars that gives either the bondholder and/or the issuer an option to enforce early redemption of the bond. The most common type of option embedded in a bond is a call feature. A call provision grants the issuer the right to redeem all or part of the debt before the specified maturity date. An issuing company may wish to include such a feature as it allows it to replace an old bond issue with a lower coupon rate issue if interest rates in the market have declined. As a call feature allows the issuer to change the maturity date of a bond it is considered harmful to the bondholder s interests therefore the market price of the bond at any time will reflect this. A call option is included in all asset-backed securities based on mortgages, for obvious reasons. 

Integrated Solutions Nokia realized that an important issue with cell phone providers was both provision of the cell phone as well as choice and upgradeability of the equipment associated with managing customer calls. Nokia came up with a list of standard plug-and-play equipment that were guaranteed to work seamlessly with all the Nokia-certified equipment. This confidence in the continual provision of certified equipment enabled its customers to purchase Nokia products, knowing that the total cost of ownership could be optimized. 

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