Make-Whole Call

A make-whole call provision is a feature of a bond or other debt instrument that allows the issuer to redeem the security before its maturity date by paying investors the present value of the remaining cash flows they would have received if the security had not been called. This provision is typically included in bonds with fixed interest rates to compensate investors for the loss of future interest payments that they would have received if the security had not been called. Make-whole calls are often used to provide issuers with flexibility to refinance their debt at lower interest rates or to take advantage of other financing opportunities.