Put Provision

A condition that allows a bondholder to resell a bond back to the issuer at a price - which is generally par - on certain stipulated dates prior to maturity. The put provision is an added degree of security for the bondholder, since it establishes a floor price for the bond. This mitigates the risk of a decline in the bond price in the event of adverse developments such as rising interest rates or a deterioration in the credit quality of the bond issuer.

Since a put provision gives the bondholder the right but not the obligation to sell or "put" the bond to the issuer, it is akin to the sale of a put option by the bond issuer to the bondholder. As a result, a bond with a put provision will generally be priced higher than a comparable bond without a put provision.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Put provision — Gives the holder of a floating rate bond the right to redeem his note at par on the coupon payment date. The New York Times Financial Glossary …   Financial and business terms

  • put provision — Gives the holder of a floating rate bond the right to redeem ( redemption) the note at par on the coupon payment ( coupon payments) date. Bloomberg Financial Dictionary …   Financial and business terms

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  • poison put — USA Provisions in a loan agreement or indenture which give the lender the right to accelerate repayment of its loan (or renegotiate the loan agreement) or the bondholders the right to be redeemed (redemption) at par (par value) if certain events… …   Law dictionary

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  • Dead Hand Provision — A stipulation on a defense mechanism (or poison pill) used by companies in order to protect against a merger or takeover by another company. The dead hand provision prevents the removal of the poison pill, a strategy used to discourage a hostile… …   Investment dictionary

  • self-executing provision — A provision of a constitution which is effective without legislation, no action by the legislature being required to put it in operation. 16 Am J2d Const L § 94. A constitutional provision may be said to be self executing when it takes immediate… …   Ballentine's law dictionary

  • To put forth the hand against — Hand Hand (h[a^]nd), n. [AS. hand, hond; akin to D., G., & Sw. hand, OHG. hant, Dan. haand, Icel. h[ o]nd, Goth. handus, and perh. to Goth. hin[thorn]an to seize (in comp.). Cf. {Hunt}.] 1. That part of the fore limb below the forearm or wrist in …   The Collaborative International Dictionary of English

  • To put the finishing hand to — Hand Hand (h[a^]nd), n. [AS. hand, hond; akin to D., G., & Sw. hand, OHG. hant, Dan. haand, Icel. h[ o]nd, Goth. handus, and perh. to Goth. hin[thorn]an to seize (in comp.). Cf. {Hunt}.] 1. That part of the fore limb below the forearm or wrist in …   The Collaborative International Dictionary of English

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