Call Premiums

These come into play once the period of call protection ends. For high yield bonds this is usually, the premium on the first call date is par plus 50% of the coupon, declining in a linear fashion thereafter each year. As an example a 9% bond due in 10 years with five years of call protection, would typically be callable at 104.5% of par upon the fifth year outstanding, then at 103%, 101.5% and par in the following years, representing a par-plus-50% coupon, 33%, 17% and par. Loans do not typically have call protection or a premium but if they do this is usually set at 1% for the first year after the call protection ends (usually 6-12months).

Capital at risk. No FSCS cover. See Risk Statement.