The Influence of Buyback Features on Coupon Rate and Bond Ratings

The buyback feature is a feature that is owned by the type of callable bonds, where the issuer has the right to pay off the bond before maturity at the call price. This study aims to obtain empirical evidence regarding the effect of the buyback feature on coupon rates and bond ratings. The population in this study are all companies listed on the Indonesia Stock Exchange and issuing bonds in the period of 2016 - 2018. The sampling technique of this study used non probability sampling with a purposive sampling method to obtain 170 research samples. Data analysis technique used is Multivariate Analysis of Covariance. The results of the hypothesis test concluded that the H1 and H2 hypotheses were rejected, so the buyback feature did not significantly have a positive effect on the coupon rate and did not have a significant negative effect on the bond ratings. Keywords: bonds, buyback features, coupon rates, bond ratings.