Hard Call Protection

is a call provision on a bond may be a specific date after which the company can call bonds, requiring investors to turn them in for the face amount or the face amount plus a premium. For example, a 12-year bond issue may be callable after five years. The five years until a bond can be called is known as hard call protection. Investors know they will earn the interest paid by the bond until at least the first call date. When bonds are purchased, the broker will usually provide the yield-to-call as well as the yield-to-maturity to show an accurate assessment of the investment potential.