Right of the
issuer to force holders on a certain date to
redeem their
convertibles for cash. The objective usually is to force holders to convert into common prior to the redemption deadline. Typically, an
issue is not
called away unless the
conversion price is 15-25% below the current level of common. An exception might be where an
issuer's tax rate is high, and the issuer could replace it with
debt securities at a lower after-tax cost.