Financial Terms related to Bonds This document is part of the valuable contents available at www.ftpall.com, a free onlineglossary with more than five thousand financial and business terms. This document can be copied and distributed freely Find thousands of financial terms at www.ftpall.com respecting its original format. It is forbidden its transcription, translation or change on its format without authorization of its author or editor.BONDSBaby bonds • Are bonds which have denominations less than $1,000 per bond.Brady bonds • These are issued in conjunction with defaulted Latin American sovereign debt. Named after a Treasury secretary, Nicholas Brady. Brady bonds are debt-for-debt swaps. • Bonds issued by emerging countries under a debt reduction plan.Century bonds • Are securities with a maturity equal to 100years.Corporate bonds • Debt obligations issued by corporations. • Are obligations issued by corporations. They are frequently categorized as follows:
www.ftpall.com 2|Page Intermediate Corporates, Distressed Securities, Junk Bonds, Long Industrials, Tennessee Valley Authority Bonds, •Utilities. There are other categories and subcategories, such as, financials -bank and nonbank, foreign, Canadian, Yankee and the list goes on. Find thousands of financial terms at www.ftpall.comCushion bonds • High-coupon bonds that sell at only a moderate premium because they are callable at a price below that at which a comparable noncallable bond would sell. Cushion bonds offer considerable downside protection in a falling market. • High-coupon bonds that sell at only at a moderate premium because they are callable at a price below that at which a comparable non-callable bond would sell. Cushion bonds offer considerable downside protection in a falling market.Dollar bonds • Municipal revenue bonds for which quotes are given in dollar prices. Not to be confused with "U.S. Dollar" bonds, a common term of reference in the Eurobond market. • Municipal revenue bonds for which quotes are given in dollar prices. Not to be confused with U.S. Dollar bonds, a common term of reference in the Eurobond market.Eurodollar bonds • Eurobonds denominated in U.S. dollars.Euroyen bonds
www.ftpall.com 3|Page • Eurobonds denominated in Japanese yen.Extendible bonds notes • Bonds with short terms to maturity, typically 1 to 5 years, that can be renewed for a similar period at the option of the holders.Floating rate bonds • bonds where the stated interest rate is adjusted periodically within stated limits in response to changes in specified money or capital market rates. Find thousands of financial terms at www.ftpall.comFlower bonds • Government bonds that are acceptable at par in payment of federal estate taxes when owned by the decedent at the time of death.Global bonds • Bonds that are designed so as to qualify for immediate trading in any domestic capital market and in the Euromarket.Hurricane bonds • Are also Catastrophe Bonds issued to pass on unacceptably high risks to speculators. In exchange, these speculators may receive potentially greater-than- market rates of return. These bonds have characteristics comparable to those for risky Collateralized Obligation tranches.Income bonds • Bonds that pay interest only when earnings are available. • Refer to securities which promise to repay the principal when due. However, these bonds differ from other bonds in that they promise to pay interest only when it is earned. This type of bond is verisimilar to many kinds of preferred stock. However, an advantage can be the tax deductibility of the interest charge when paid versus a preferred dividend payment. These bonds are sometimes known as Adjustment
www.ftpall.com 4|Page Bonds. The quality of these bonds generally is not as good as investment grade issues because there is an additional contingency on the payment of interest.Intermediate corporate bonds • Are investment grade notes and bonds issued by corporations. The maturities range between 1 to 10 years. These securities encompass banks, other financial institutions, and industrial issuers.International bonds Find thousands of financial terms at www.ftpall.com • A collective term that refers to global bonds, Eurobonds, and foreign bonds.Investment grade bonds • A bond that is assigned a rating in the top four categories by commercial credit rating companies. For example, S&P classifies investment grade bonds as BBB or higher, and Moodys classifies investment grade bonds as Ba or higher. Related: High-yield bond.Junk bonds • Refer to non-investment grade debt securities. Sometimes, these issues are called high yield securities. These securities have credit ratings below Baa/BBB-.Long bonds • Bonds with a long current maturity. • Bonds with a long current maturity. The long bond is the 30-year U.S. government bond.Premium for bonds • Is the amount of price above par for Mortgage Backed Securities, Corporate Bonds, and Treasury Bonds. For convertibles, it is the amount that the convertible security is trading over the converted out value of the underlying instrument.Principal collateralization bonds
www.ftpall.com 5|Page • These bonds are issued in conjunction with defaulted Latin American Sovereign debt. The U.S. Government has issued Treasury bonds to collateralize (guarantee) the principal value of these bonds.Real return bonds • Abbreviated RRB. Bonds that adjust the semi-annual coupon payments and the par value for inflation.Retractable bonds Find thousands of financial terms at www.ftpall.com • Bonds that give the bondholder the option to sell the bond back to the issuing company at par ($1,000) either on a specific date, and every 1 to 5 years thereafter, or if the firm is acquired, acquires another company, or issues a large amount of additional debt. Usually carries a lower yield than non-retractable debt of the same quality.Scheduled bonds • Are instruments which are engineered to receive principal payments using stipulated payment schedules. Generally, the term is used for bonds other than Planned Amortization Class (PAC) and Targeted Amortization Class (TAC) issues.Serial bonds • An issue of bonds of which a certain proportion matures each year. • A bond issue in which maturities are staggered over a number of years. • Is an issuance of bonds which have different maturity dates for the principal. Often these bonds are issued ona year-by-year basis but there can be maturity gaps as well. • Corporate bonds arranged so that specified principal amounts become due on specified dates. Related: term bonds.Short bonds
www.ftpall.com 6|Page • Bonds with a short current maturity. • Bonds with short current maturities.Short dated bonds • Long-term government bonds that are approaching maturity.Stocks and bonds hedge funds • Are combinations which are analogous to Balanced Mutual Funds but, depending on the underlying charter, can use higher degrees of leverage or derivatives. Find thousands of financial terms at www.ftpall.comSupport bonds • Are a class of securities that absorb many of the risks of the Planned Amortization Class structure.U.s. savings bonds • Registered, nontransferable securities issued by the U.S. government in amounts up to $10,000.Zero or low coupon bonds • Bonds issued with no (zero) or very low coupon rates and sold at a large discount from par. Canada Customs and Revenue Agency (CCRA) deems the apparent capital gains on such bonds as interest income.