Optional redemption usually requires the payment of a premium for its exercise, with the amount of the premium decreasing the nearer the option exercise date is to the final maturity date of the issue.
A syndicate is also often referred to as an account or underwriting account." TAC (targeted amortization class) tranche A TAC tranche uses a mechanism similar to that of a sinking fund to determine a fixed principal payment schedule based on an assumed prepayment rate.
Securities designed to protect investors and the future value of their fixed-income investments from the adverse effects of inflation.
The more convex a security is, the more its duration will change with interest rate changes.After the initial offering, existing shares can only be bought from existing shareholders.The yield to maturity can be derived from present value tables, bond yield tables, or by using internal rate of return programs in financial calculators or in computer spreadsheets.New-issue market Market for new issues of bonds and notes.In the late 1970s and early 1980s, interest rates were at historic highs.
Z-tranche Often the last tranche in a CMO, the Z-tranche receives no cash payments for an extended period of time until the previous tranches are retired.
Defeasance Termination of the rights and interests of the trustee and bondholders under a trust agreement or indenture upon final payment or provision for payment of all debt service and premiums, and other costs, as specifically hgtv home giveaway winners provided for in the trust instrument.
Flow of funds Refers to the structure which is established in the bond resolution or the trust documents which sets forth the order in which funds generated by the enterprise will be allocated to various purposes.Examples include tender option bonds, trust certificates with interest rate swaps, and stripped interest rate bonds.Government securities but increasingly involving other types of securities and financial assets as well, whereby the seller "sells" the securities to the buyer, with a simultaneous agreement to repurchase the securities at an agreed upon price at a future point in time.Tax Anticipation Note (TAN) TANs are issued by states or local governmental units to finance current operations in anticipation of future tax receipts.Holders of either taxable or taxexempt OlDs are referred to Internal Revenue Service Publication 550, "Investment Income and Expense." OID rules do not apply.S.Convertible bond A corporate bond that may be converted into shares of another security under stated terms, often into the issuing company's common stock.Constant maturity treasury (CMT) A series of indexes of various maturities (one, three, five, seven or 10 years) published by the Federal Reserve Board and based on the average yield of a range of Treasury securities adjusted to a constant maturity corresponding to that.PO (principal-only) security In the case of a CMO, a PO tranche is created deliberately to pay investors principal only and not interest.Debenture Unsecured debt obligation, issued against the general credit of a corporation, rather than against a specific asset.