A put option on a bond is a provision written into the terms of a bond that allows the investor to sell it back to the issuer before its final maturity. The holder may exercise the right on dates listed in the put schedule, or on the occurrence of a trigger such as a change of control of the issuer or a credit rating downgrade. The repayment price is fixed in advance, usually at or near face value. A bond with this feature is called a puttable bond.
The option protects the investor: if interest rates rise or the issuer's credit weakens, the holder can recover the principal and reinvest elsewhere. Investors pay for this through a lower yield than on an otherwise identical bond. It is the mirror image of the call option on a bond, which belongs to the issuer.