Put Bond
Put bond is an uncommon type of bond, which gives the holder of the bond the right, but not the obligation, to redeem the bond at one date before maturity date, or at multiple different dates before maturity. If there is only one time possible for bond redemption, such bond is called "one-time put bond." The bond is sold back to the issuer at predetermined price, usually at par value.
Investors will usually exploit redemption feature of such bond if interest rates move upwards after the issuance of the bond.
Put bond is also called "variable rate demand obligation-VRDO" or "multimaturity bond."
| Related Terms: Put Provision |
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