Bonds issued at a discount, repayable at par, but called early

Hi guys,

If a bond is issued at a discount but redeemable at par in a certain number of years, with an embbeded call provision, is called early by the company: will the bond be called and redeemed at par or at a slight discount?

Example: AB Inc issues a 5-year bond issued at a 15% discount but redeemable at par with an embedded call provision. After 3 years, the company exercises its embedded call provision and calls the bond back.

How much will each bondholder get for the bonds called back? Will they get the par value, or less than that because the bond’s amortization of discount has been cut short by the calling back of the bond?

Regards,

It will be redeemed at the call price, which is usually at a premium to par.

The call price is specified in the indenture.