Redeem
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Banking basics
A recap of a few things you’d think financial professionals ought to know
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Redeem
/rɪˈdiːm/ (n.)
O a financial instrument, to surrender it for cancellation against payment, delivery or some other abstract benefit, such as the discharge of a liability.
Debt securities
Most debt securities are redeemed against payment of their face value — or some other specified amount — on a specified redemption date.
Emissions allowances
Emissions allowances are funny things in that they are redeemed against discharge of an obligation to pay the penalty that arises if you discharge carbon and don’t redeem them, but that penalty is oddly never payable as long as you do redeem them. There is some weird ontological cart-and-horse magic going on here, so it is best not to think to hard about it.