When a Corporation Repurchases Its Bonds From the Bondholders, the Bonds Are Called ____ Bonds.
When a corporation repurchases its bonds from bondholders, they are known as retired bonds, signifying their redemption and inactivity in the market.
by Sai V
Updated Oct 30, 2023
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When a Corporation Repurchases Its Bonds From the Bondholders, the Bonds Are Called ____ Bonds.
When a corporation repurchases its bonds from the bondholders, the bonds are called retired bonds.
This term is used because these bonds have been redeemed or repurchased from the investors, making them inactive in the market. Once repurchased, they are no longer held by external investors and are effectively retired by the issuing corporation.
What is a Retired Bond?
A retired bond refers to a previously issued bond that has been repurchased by the issuer, either at its scheduled maturity or earlier if it is callable. This repurchase allows the corporation to return the principal amount to investors, fulfilling its debt obligations and effectively removing the bond from circulation in the market.
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