Illiquid insurance contracts that provide guaranteed principal repayment and interest payments for a predetermined period of time. |||Funding agreements are marketed to mutual fund companies and municipal reinvestments. These products are generally used for their security and flexibility as they can be altered to meet the specific cash-flow needs of the contract holder.
A company's debt, such as bonds, long-term notes payables or debentures that will mature in more than one year or one business cycle. This type of debt is classified as funded debt because it is funded by interest payments made by the borrowing firm over the term of the loan.Funded debt is synonymous with "long-term debt". |||Funded debt is one form of financing a company can use to finance its long-term capital projects, such as the addition of a new product line or the expansion of operations. The firm may also use short-term financing to fund its long-term operations. This exposes the firm to a higher degree of interest rate and refinancing risk, but allows for more flexibility in its financing.
Debt securities that are issued or guaranteed by a sovereign government. Government paper of a nation is usually perceived as the least risky debt securities in that country, and will offer investors the lowest yields compared with debt of a similar maturity issued by other entities in that nation. |||Risk perceptions of government paper issued by different nations vary widely depending on a number of factors including credit rating, default history, political stability etc. U.S. government paper is considered to be among the safest investments and practically risk-free.
A strategy used by the Federal Reserve to receive the highest return on securities. The Federal Reserve solicits bids/offers from the primary dealers to receive the best deal whether it be for buying, selling, reversals or repurchase agreements. |||This strategy applies to all forms of U.S. Treasury Bills, Treasury Bonds, etc. In soliciting to the primary dealers (institutions that are permitted to deal new issues of government bonds), the Federal Reserve System is able to obtain the highest possible returns.
The 15-year pass-through securities offered under Freddie Mac's cash program. |||Investors sell their mortgages through Freddie Mac's cash program. The 15-year mortgages sold to Freddie Mac form the pool of mortgages that back the securities referred to as gnomes.
Bonds that can be offered within the euromarket and several other markets simultaneously. |||Unlike eurobonds, global bonds can be issued in the same currency as the country of issuance. For example, a global bond could be both issued in the United States and denominated in U.S. dollars. Global bonds are usually issued by entities that have high credit ratings.
Risk-free bonds issued by the British government. They are the equivalent of U.S. Treasury securities. |||The name "gilt" comes from the original British government certifications that had gilded edges.
High-grade bonds that are issued by a government or firm. This type of security originally boasted gilded edges, thus the name. In the case of a firm, a gilt-edged security is a stock or bond issued by a company that has a strong record of consistent earnings and can be relied on to cover dividends and interest. |||Gilt-edged securities are a high-grade investment with very low risk. Typically, these are issued by blue chip companies that dependably meet dividend or interest payments because they are well-established and financially stable .