When a transaction occurs, you look at the time left to maturity to determine for government of canada bonds and guaranteed bonds when the transaction settles. but what if the bonds have a call date? if the bonds have a call date, and the transaction occurs at a premium (i.e., the price of the bond is currently above par), this implies that interest rates are lower than when the bond was first issued. if thats the case, it is very likely that the government will call the bonds at the earliest chance they get and refinance the debt. so if the transaction is completed at a premium, you look at the earliest call date to establish when the bond transaction settles.so if the bond trades at a premium and has a call date 2 years from now, for example, the transaction settles 2 business days later. if the bond trades at a premium and has a call date of 4 years, as an example, the bond settles three business days after the transaction takes place.if the bonds do not trade at a premium, it is unlikely that the bond will be called and you can use the date of maturity to figure out when the bond transaction settles, rather than the earliest call date.from my understanding, the government of canada currently does not offer callable bonds. but the settlement procedures mentioned above still remain in place in the iiroc rulebook.
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