Deferment Period
The period after the issue of callable security during which it cannot be called by the issuer. Investopedia Says:
Different types of securities will have a call option allowing the issuer to buy them back at a predetermined price. The issuer cannot call the security back during the deferment period, which is uniformly predetermined by the underwriter and the issuer at the time of issuance.
For example, European options have a deferment period for the life of the option (they can be called only on expiry). Most municipal bonds are callable and have a deferment period of 10 years. Related Terms:
Call Premium
Callable Bond
Extraordinary Redemption
Forced Conversion
Issuer
Underwriting |