Bonds can be categorized based on their coupon structure. Some bonds offer fixed coupon yields, meaning the interest payments remain constant throughout the life of the bond. For example, you might have a bond like "Bank of America Corporation, 5.875% 7feb2042, USD" where the coupon rate is...
Bank Bondsshall have the meaning ascribed thereto in Section 4.06(b)(i) hereof. Escrowed Bondsmeans Municipal Obligations that (i) have been determined to be legally defeased in accordance with S&P’s legal defeasance criteria, (ii) have been determined to be economically defeased in accordance...
Bank Bonds shall have the meaning ascribed thereto in Section 4.06(b)(i) hereof. Subsequent Bonds means any Bonds issued after the First Issue Date on one or more occasions. Completion Bonds means Bonds issued pursuant to a Supplemental Indenture ranking on parity with the Series of Bonds issue...
Also Read:Call Provision – Meaning, Types, Working and More Call Schedule Callable bonds often have a predefined call schedule, specifying the dates on which the issuer can exercise their call option. The call schedule outlines the earliest and subsequent call dates, providing transparency regarding...
Most bonds are taxable, meaning the income that bonds produce is taxable. On the other hand, the income from tax-exempt bonds, like tax-exempt municipal bonds, may be exempt from Federal, state, and local taxes. Emerging market (EM) bonds ...
Differentiate between the stated rate and the market rate, and discuss how each of these rates is used in accounting for bonds. What is the difference between a registered bond and a bearer bond? Explain the meaning of each of the following terms as they relate to...
There are mainly two types which are as follows: Single Step-Up Bonds/Note When there is only one increase (or step-up) in the coupon rate over a bond life cycle, we call such bonds single step-up bonds or notes. For example, a 5-year step-up bond might have a coupon rate that...
5.41. The bond is sold 5 years before its maturity, interest, and par are repaid at the end of the term, and interest accrues at a rate of 7% per annum. Determine at what rate this bond should be sold so that the placement rate is 8% per annum? 5.42. Explain the meaning of the...
as interest rates rise, the existing fixed-rate instruments are not as attractive. As convexity decreases, the exposure to market interest rates decreases, and the bond portfolio can be considered hedged. Typically, the higher thecoupon rateor yield, the lower the convexity...
The primary difference between BAA and AAA bonds lies in their credit ratings and associated risk levels. BAA bonds are rated as medium-grade investments byMoody’s Investors Service. They are considered to be of moderate credit quality, meaning they carry a higher risk of default than higher-r...