Make Whole
Definition:
Shorthand for the “make whole call” or “make whole provision” feature in an Indenture in relation to a bond. A type of Call Option allowing the borrower to pay off remaining debt early. The borrower has to make a lump sum payment derived from a formula based on the Net Present Value (or NPV) of future Coupon payments that will not be paid because of the exercise of the Call Option. This provision is meant to give the debt holder the Yield they had anticipated to the earliest optional redemption date. Also known as a Prepayment Premium.