easy · Debt Capital Markets bond-instruments-structures
How does a sinking fund (mandatory redemption) differ from an optional call feature?
- Sinking funds only apply to zero-coupon bonds
- Optional calls are required by law, whereas sinking funds are voluntary
- Sinking funds are mandatory obligations, while optional calls are at the issuer's discretion
- Optional calls always benefit the investor, whereas sinking funds benefit the issuer
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