Callable

Definition

A callable preferred share gives the issuer the option — not the obligation — to redeem the issue at par value starting from a specific date (call date). This clause protects the issuer: if market rates fall after issuance, it can refinance at a lower cost by redeeming the old preferred. For the investor it is an asymmetric risk: just when it would be advantageous to hold the instrument (low rates, high yield) is exactly when the issuer is most likely to call it. All of Strategy's preferreds (STRK, STRF, STRC, STRD) and Strive's (SATA) are callable.

In Context