A bond (specifically a callable step-up bond) whose coupon is increased more than one time over its life. This bond pays a rate of interest higher than an otherwise identical fixed-rate, bullet maturity bond, and then is either called by the issuer or steps up to a higher coupon rate. This bond may pay successively higher fixed-rate coupons in later periods of its life, provided that it has not yet been called (in which case it is known as a variable step-up bond). This bond may be structured as illustrated in the following example:
| Year 1 | 5% |
| Year 2 | 6% |
| Year 3 | 7% |
| Year 4 | 9% |
| Year 5 | 11% |
| Right to call | The bond becomes callable after year 1, and thereafter every three months |
Such a bond becomes callable after some time from its issue date. Thereafter, the issuer has the right to recall it every quarter or so. Once it is called, the bond no longer exists.
