A guarantee placed on a loan on behalf of the borrowing party by the borrowing party's parent company or stockholder. By guaranteeing the loan for its subsidiary company, the parent company provides assurance to the subsidiary company's lenders that the subsidiary company will be able to repay the loan. The guarantee requires the parent company to repay the loan if the subsidiary is unable to. |||A downstream guarantee can be undertaken in order to help a subsidiary company obtain debt financing that it otherwise would be unable to obtain, or to obtain funds at interest rates that would be lower than it could obtain without the guarantee from its parent company. This is because, once backed by the financial strength of the parent company, the subsidiary company's risk of defaulting on its debt is considerably less. It is similar to one individual cosigning for another for a loan.
A series of indices that track North American and emerging market credit derivative indexes. The purpose of the combined indexes is to track the performance of the various segments of credit derivatives so that the overall return can be benchmarked against funds that invest in similar products. |||This family of indices comprises a basket of credit derivatives that are representative of certain segments such as North American investment grade credit derivatives, high volatility, high yield, high yield non-investment grade, as well as emerging markets.
A sinking fund provision that gives a bond issuer the right to redeem twice the amount of debt when repurchasing callable bonds. A doubling option allows the issuer to retire additional bonds at the sinking fund's call price. |||This option will usually be exercised as current interest rates move lower than the bond's yield. The firm will be motivated to repurchase more debt through the sinking fund option and refinance itself at the lower rates.
The status accorded to municipal bonds for which interest is not subject to taxation at either the federal or state level. In general, most states do not tax residents on interest income arising from tax-exempt bonds issued by that state, its agencies, its cities or other political entities. However, virtually all states tax individuals on interest from bonds issued out-of-state, although those bonds remain exempt from federal taxes. |||Municipal bonds, including those for which the interest is not taxable at the state or local level, are attractive to taxpayers who wish to minimize or avoid taxes on their interest income. These securities often pay a commensurately lower interest rate than taxable issues such as corporate bonds, although depending on one's tax bracket and comparative yields, they may sometimes yield more on an after-tax basis. Double exempt bond income can be an AMT preference item in some cases. From a tax perspective, this treatment often makes bonds issued in one's home state more attractive than those issued out-of-state. Some interest from municipal securities is also exempt from local income tax in jurisdictions where such taxes apply, technically making them triple tax-exempt.
An investment strategy, used mainly for bonds, where holdings are heavily concentrated in both very short and long term maturities. |||This is also known as a barbell, charting on a timeline gives the appearance of a barbell or dumbbell.
A bond that pays interest in one currency but pays the principal in a different currency. The amount of the principal repayment is set at initiation and paid at maturity. This principal amount usually allows for some appreciation in the exchange rate of the stronger currency. These issues are common in the Eurobond market and are a useful source of capital for multinational companies. |||There are three methods used in applying the exchange rate to principal and interest payments from dual currency bonds: 1. The use of the prevailing exchange rate when the bond is issued 2. The use of the existing exchange rate (spot rate) at the time cash flow payments are made 3. The use of the currency that is chosen from the two currencies by the investors or issuers of these bonds - also known as an "option currency bond"
The difference in price between the front month and back month in a mortgage-backed security (MBS) dollar roll trade. A dollar roll is a popular type of trade in the MBS pass-through TBA market. According to forward securities pricing theory, the front month price should be higher than the back month price. The drop is a function of current short-term interest rates, prepayment estimates, and the supply and demand for pass-throughs in the current delivery or front month. |||A pass-through Tbasecurity is said to be trading through fail when the drop is larger than what it would cost a mortgage originator, investor or securities dealer to fail to deliver into a TBA contract for an entire month. When there is a shortage of supply or extreme demand for a Tbasecurity in the current delivery month, the drop can increase to fail or larger, reflecting the fact that securities dealers would rather roll a trade out an additional month at a large drop or fail to deliver that security for an entire month than make delivery in the current month.
A security that is issued with a variable or floating interest rate, but that converts to a fixed-rate security if its reference rate reaches or falls below a predetermined level. The conversion from a floating-rate to a fixed-rate security can be viewed as an embedded option for a cap and a floor on the fixed income security. Usually, these features are used to protect borrowers from high interest rates. |||In the U.K., the term "droplock mortgage" refers to variable interest rate mortgages that can be converted to a fixed rate by the borrower without incurring a penalty or paying additional fees. Droplock mortgages are attractive when interest rates are perceived to be heading higher.
登录
工商服务
危机公关
金融律师
app开发
财税服务
金融牌照
网站建设
知识产权
企业征信
审计评估