Professional Documents
Culture Documents
Bonds: Financial Terms Related To Bonds
Bonds: Financial Terms Related To Bonds
BONDS
Baby 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.
Century bonds
Corporate bonds
Intermediate Corporates,
Distressed Securities,
Junk Bonds,
Long Industrials,
•Utilities. There are other categories and subcategories, such as, financials -bank
and nonbank, foreign, Canadian, Yankee and the list goes on.
• 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
Euroyen bonds
www.ftpall.com 3|Page
• 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.
• bonds where the stated interest rate is adjusted periodically within stated limits in
response to changes in specified money or capital market rates.
• 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
Income bonds
• 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.
• 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
• 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. The long bond is the 30-year U.S. government
bond.
• 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.
• 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.
• Abbreviated RRB. Bonds that adjust the semi-annual coupon payments and the
par value for inflation.
Retractable bonds
Scheduled bonds
Serial bonds
• 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.
Short bonds
www.ftpall.com 6|Page
• Are combinations which are analogous to Balanced Mutual Funds but, depending
on the underlying charter, can use higher degrees of leverage or derivatives.
• Are a class of securities that absorb many of the risks of the Planned Amortization
Class structure.
• 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.