A preferred stock that is subject to callability/ redemption. This hybrid preferred stock may provide for the right of the issuer to recall (i.e., buy back) the shares at a specified date and for a preset price. Likewise, preferred stock may be redeemable at the holders’ discretion (in which case it is referred to as puttable preferred stock), provided that the issuer has sufficient funds to pay off the redemption amount. An issuer-redeemable preferred stock is advantageous to the issuer because the capital raised whereby will be available as long as the issuer needs and can be paid off whenever the issuer deems fit. The redemption price is usually slightly above the issuance price. For example, the redemption price for a $100 par value preferred stock might be $103.

It is also known as a callable preferred stock.