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Make Whole Call

The Make Whole Call (MWC) is originally an option in the "final terms" of some of US bonds. This option entitles the issuer to redeem all or part of the bonds prior to maturity at a margin known from the origin.

The margin of redemption (Make Whole Margin) is calculated, once the margin of the issue against the U.S. Treasury has been defined, during the pricing of the bond.
The interest of a MWC compared with a classical repurchase transaction or exchange is obvious for the company as it knows the price and the amound that may be repurchased from the start without surprise.
The US Investors recognize that companies need to manage their liquidity gaps "actively". The exercise of the MWC is a sign of "good management" for investors.
In this paper, FBA/CNO describes the main characteristic of Make Whole Call issues in Euros.

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last update 02 June 2020