A provision that requires the issuer of a callable bond to replace the bond with a non-callable bond of similar maturity and interest rate in the case that the security is called before maturity is reached. Conditional call options usually only refer to junk/high-high yield fixed income securities. 



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Call options help protect investors holding high-yield bonds from having their securities called early. If an issuer wants the security back then another high-yield bond has to replace the one the investor had to give up. While the terms of the new bond might not be exactly the same, the provision does mitigate some downside risk to the investor.