Corporate Call Policy for Nonconvertible Bonds.

We examine corporate call policy for 1,642 nonconvertible bonds that were called during the period 1975-94. The vast majority of firms delay calls and call when the bond price exceeds the call price. We find that larger, less liquidity constrained firms with a larger opportunity cost of delaying a call have shorter call delays. There is no evidence that refunding transaction costs, wealth redistribution effects, call notice periods, or a desire to eliminate restrictive covenants influences the timing of calls. An examination of call motives suggests that there is no one underlying motive that fits the average call. Copyright 2000 by University of Chicago Press.