Answer: has a sinking fund provision.

**Explanation:** - **Option A (Incorrect):** A callable bond allows the issuer to retire the bond before maturity, but it does not mandate the issuer to do so annually. - **Option B (Incorrect):** A step-up note features a coupon rate that increases over time according to a predetermined schedule, but it does not involve the retirement of principal. - **Option C (Correct):** A sinking fund provision requires the issuer to retire a portion of the bond's principal each year, ensuring gradual repayment rather than a lump sum at maturity. This aligns with the requirement described in the question.

Author: LeetQuiz Editorial Team