Question：
If a bank wants the ability to retire debt prior to maturity in order to take advantage of lower borrowing rates, it most likely issues a:
A. callable bond.
B. putable bond.
C. convertible bond.
Answer = A
Callable bonds give issuers the ability to retire debt prior to maturity. The most compelling reason for them to do so is to take advantage of lower borrowing rates.
CFA Level 1
"Fixed-Income Markets: Issuance, Trading, and Funding," Moorad Choudhry, Steven V. Mann, and Lavone F. Whitmer
Section 6.3.5
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