A callable or call bond that the issuer has chosen to redeem before the maturity date.

It may be said that this bond has been 'called away.' A callable bond is redeemed when it becomes advantageous for the issuer to buy back the bond prior to maturity. This often happens when interest rates fall, presenting the issuer with the opportunity to refinance debt at lower coupon rates. At this point, if the issuer exercises the call option, the investor is contractually obligated to comply.