What does it mean if a bond is "callable"?

A "call" feature protects the issuer from changes in the prevailing interest rate, allowing the bond to be called back and retired prior to the originally announced maturity date. 

For example, a bond gives a 7 percent coupon for 5 years, but becomes callable after 2 years. If there's a drop in the market interest rate to 4 percent after 2 years, the issuer might want to call back the bond, and re-issue new bonds at 4 percent.

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