Extendible bond (or extendable bond[1]) is a complex bond with the embedded option for a holder to extend its maturity date by a number of years.[2][3] Such a bond may be considered as a portfolio of a straight, shorter-term bond and a call option to buy a longer-term bond. This relatively rare type of bond works to the advantage of investors during periods of declining interest rates.[4] Pricing of the extendible bond will be similar to that of a puttable bond.

Sometimes, the bond may be structured so as to give an option to extend to the issuer.[5] In this case, pricing will be similar to that of a callable bond.


Further information: Bond option § Embedded options

Price of extendible bond = Price of straight bond + Price of the option to extend


  1. ^ extendable bond
  2. ^ Financial Times Lexicon
  3. ^ "Investment Alternatives". Archived from the original on 2011-07-06. Retrieved 2010-10-18.
  4. ^ Extendable bond — Invest Definition
  5. ^ Extendable Bond
  6. ^ IMF Puttable and Extendible Bonds