Companies call in bonds when general interest rates are lower than the coupon rate on the bond, thereby retiring expensive debt and refinancing it at a lover rate, much as a homeowner will refinance his mortgage if interest rates have fallen significantly below his old mortgage rate. Many times the borrower will issue new, lower interest bonds and use the proceeds to call in the older, higher interest bonds. This protection usually prohibits the bonds from being called during a stated period of time after issuance, typically five to ten years. Call features can affect the value of a bond, in effect setting a ceiling on the bond value, since informed buyers are unwilling to pay more than the call price for a bond which is subject to being called at any time. If the loan is secured by collateral, the indenture will specify the nature.
Organizations issue bonds for a variety of reasons.
Let's say a corporation needs to build a new office building, or needs to purchase manufacturing equipment, or needs to purchase aircraft. Or maybe a city government needs to construct a new school, repair streets, or renovate the sewers. Whatever the need, a large sum of money will be needed to get the job done. One way is to arrange for banks or others to lend the money. Corporate bonds are issued by companies of all sizes.