medium · Debt Capital Markets
How does an equity clawback typically differ from a 'Make-Whole' call in terms of execution cost for the issuer?
- Equity claws are always more expensive because they require a higher premium than the present value of future coupons.
- There is no difference; both are terms for the same early redemption mechanism.
- The equity claw uses a fixed premium (e.g., 108%), whereas the make-whole is a floating price based on Treasury yields.
- The make-whole call is only available after the IPO, while the equity claw is available at any time.
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