In the context of the municipal bond market, "without recall" refers to a type of dealer quote. This quote indicates that a dealer is offering a bond for sale without the option to buy it back at a predetermined price within a specified time frame, which is often one hour. Once the quote is made, the dealer cannot retract the bond or cancel the option to purchase.
The term "without recall" is primarily used in the realm of municipal bonds, which are debt securities issued by local government entities. It is relevant in financial transactions involving bonds, where clarity on the terms of sale is essential. Understanding this term can help investors make informed decisions about buying bonds, especially when considering the time-sensitive nature of such transactions.
Here are a couple of examples of abatement:
Example 1: A municipal bond dealer quotes a bond at a price of $1,000 without recall for one hour. During this hour, an investor can purchase the bond at that price, but the dealer cannot withdraw the offer.
Example 2: A city issues bonds to fund a new park. A dealer provides a quote for these bonds without recall, allowing investors to buy them at a fixed price for a limited time. (hypothetical example)
| Term | Definition | Difference |
|---|---|---|
| With recall | A dealer quote that allows the dealer to buy back the bond at a set price. | Unlike "without recall," this option gives the dealer flexibility to retract the bond. |
| Firm offer | A binding quote that guarantees the price for a specified time. | While similar, a firm offer may not specify the recall option, whereas "without recall" explicitly states it. |
If you encounter a "without recall" quote, review the terms carefully before deciding to purchase the bond. Ensure you understand the implications of the time-limited offer. If you need assistance, consider using US Legal Forms' templates for bond-related transactions or consult a financial advisor for tailored advice.
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| Attribute | Details |
|---|---|
| Typical Duration of Quote | One hour |
| Flexibility | No buyback option for the dealer |
| Market Type | Municipal bond market |
It means that a dealer's quote for a bond cannot be canceled, and the bond must be purchased at the quoted price within the specified time.