Call Date

Um, no...it's not something advertised on Craigslist. A call date does not refer to a dating service, but rather the date after which someone who issued a callable bond can redeem it (pay out the proceeds).

And what is a callable bond, you might wonder...This type of bond allows the issuer to "call it in" for redemption before the maturity date.

Let's say the Los Angeles Water Authority is tired of running low on water and wants to raise funds to build new retention tanks to hold onto the rain they get. So they issue a $2,000 callable bond with a 4% coupon (interest) rate and a maturity date of January 1, 2019. However, there's a call date of November 30, 2017 with a call price of $2,070. Because this bond issue has a call date, the 4% interest is probably better than what is being offered by similar-risk bonds and maturity dates.

So let's say in the fall of 2017 interest rates in the market tank, and the Water Authority in their wisdom decide they are going to call in the 4% bonds and issue 2% bonds. They will pay their investors a premium of $70 per bond ($2070 - $2000) to help make up for missing out on the higher interest rate for two years. The Water Authority wants to refinance their higher-interest bonds for lower-interest ones in order to incur less debt.

Since investors are losing out somewhat, callable bonds are generally worth less than non-callable bonds, so their interest rates have to start out higher.