Make whole call option

A make-whole call option is a provision in a bond agreement that allows the issuer to redeem the bond before its maturity date by paying bondholders the present value of the remaining cash flows plus a premium. 

This premium is designed to compensate bondholders for the loss of future interest payments they would have received if the bond had not been called early. The calculation of the make-whole amount is typically based on a predetermined formula specified in the bond indenture. For investors, a make-whole call option provides some protection against early redemption by ensuring they receive fair compensation if the issuer decides to call the bond before maturity.

Callable

When the premature redemption option is redeemable, the issuer has the flexibility to exercise the option and redeem the bond early, providing investors with the opportunity to receive the principal amount ahead of the original maturity date.

Non-callable

When the premature redemption option is non-redeemable, the issuer does not have the ability to trigger early repayment of the bond under predefined conditions, limiting the issuer's flexibility in managing the debt obligation.