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Redemption penalty overhang |
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Redemption penalty overhangThis is where the redemption penalty continues beyond a fixed or capped rate period, effectively tying you in to the much higher variable rate for a period of time after the fixed or capped period. As a result you get stuck paying an uncompetitive rate that eats into the gains you may have made from having the fixed rate or capped ratein the first place.Redemption penalty overhang Similar MatchesRedemptionRedemptionRepayment of a debt security or preferred stock issue, at or before maturity, at par or at a premium price. Redemption cushionRedemption cushionThe percentage by which the conversion value of a convertible security exceeds the redemption price (strike price). Extended redemption penaltyExtended redemption penaltyThis is where the redemption penalty continues beyond a fixed or capped rate period, effectively tying you in to the much higher variable rate for a period of time after the fixed or capped period. As a result you get stuck paying an uncompetitive rate that eats into the gains you may have made from having the fixed rate or capped ratein the first place. Right of redemptionRight of redemptionThe right to recover property forfeited by foreclosure by paying the outstanding principal owed plus interest. Overhanging redemption penaltyOverhanging redemption penaltyAn early redemption charge that lasts beyond the benefit period is referred to as an extended or overhanging redemption penalty. These should be avoided where possible. Further SuggestionsSerial redemptionredemption date Right of redemption Redemption price redemption redemption yield Redemption penalties Redemption Redemption Period redemption fees gross redemption yield Redemption date Redemption fee redemption price Redemption charge Redemption Preferred equity redemption stock (PERC) Redemption statement Mandatory redemption schedule |
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