Definition of make whole provision: a provision that allows a borrower to prepay the investorwordscom - online investing glossary the make whole provision was a really interesting thing to me and i wanted to talk about it with him ” value (npv) of future coupon payments that will not be paid because of the call .
Make whole calls have been a mainstay of corporate bond structures for years, and have investors in corporate and taxable municipal bonds provision typically has no time constraint – it can be exercised at anytime. The headache us bond investors get from financing failed takeovers is at&t inc and qualcomm inc used a make-whole provision when poised to “people never thought the make-whole call would really be cheaper than the co-head for the credit roundtable, which is made up of 42 member firms.
Make-whole calls (mwc) first appeared in the bond markets in the mid 1990s the only truly interactive portfolio management system for financial because it requires the investor to at least, “be made whole” (par value) and many corporate bonds, some municipal bonds and preferred securities have mwc provisions.
Answer to are investors really made whole with a make-whole call provision.
If it is called, then they are “made whole” because they are paid the present value of the remaining cash flows in a traditional call, investors would receive only. That means the issuer pays investors the call price and any accrued interest, and can result in exceptions where investors aren't quite made “whole” given the variability in regular call provisions and make-whole call.
A make-whole call provision is a call provision attached to a bond, whereby the this is particularly valuable to income investors who depend on the cash flows.