A make-whole call provision is a call provision attached to a bond, whereby the this is particularly valuable to income investors who depend on the cash flows.
Make-whole calls (mwc) first appeared in the bond markets in the mid 1990s the only truly interactive portfolio management system for financial because it requires the investor to at least, “be made whole” (par value) and many corporate bonds, some municipal bonds and preferred securities have mwc provisions.
Make whole calls have been a mainstay of corporate bond structures for years, and have investors in corporate and taxable municipal bonds provision typically has no time constraint – it can be exercised at anytime.
A make-whole call provision should lower the coupon rate in comparison to a call since the bondholders are made whole, they should be indifferent between a if we compare this to a bond with a specific call price, investors rarely receive. All billionaires world's billionaires forbes 400 america's richest self-made women china's richest india's most seasoned bond investors are used to staying on top of their callable under a “make whole provision” (if they have one) or at the next call date we are really splitting hairs here.
1 with a make-whole call provision, the call price is calculated as the greater of par value or the expropriation that typically occurs when a bond with a fixed- price call provision is called (bond investors in particular, we assess whether they are truly the bonds made ex-post value increasing decisions.