QUICK DEFINITION
Redemption is the repayment of a bond's principal by the issuer, usually at maturity or after an allowed call.
WHY IT MATTERS
Why Redemption matters in bond markets
Redemption determines when principal cash flows return to investors and when the issuer must refinance or retire debt.
MARKET CONTEXT
How to think about it
Bond investors use redemption as part of a wider framework that links prices, yields, cash flows, liquidity and risk. The concept should therefore be read together with its related terms rather than as an isolated definition.
Is Redemption important for fixed-income investors?
← Back to the Bond Market Glossary Yes. Redemption determines when principal cash flows return to investors and when the issuer must refinance or retire debt.