What can an investor receive prior to the maturity of a variable-rate demand obligation?

An investor can receive par value plus accrued interest prior to the maturity of a variable-rate demand obligation (VRDO). This is because VRDOs are designed with liquidity in mind, allowing investors to redeem them before maturity at a predetermined value. The "par value" refers to the face value of the bond, which is the amount the issuer agrees to repay at maturity. Additionally, since VRDOs often accrue interest periodically, the accrued interest up to the point of redemption will be added to this amount. Therefore, redeeming the bond before its maturity typically allows the investor to receive the total of the par value plus any interest that has accumulated until that time, providing a fair compensation for the investor's holding period.