A bond that is issued by a blue chip company. These bonds are considered to be high grade, with little risk of interest payment interruption or default. |||This is the closest you can get to a government issue without actually buying one.
A municipal bond backed by the credit and "taxing power" of the issuing jurisdiction rather than the revenue from a given project. |||General obligation bonds are issued with the belief that a municipality will be able to repay its debt obligation through taxation or revenue from projects. No assets are used as collateral.
A government debt obligation (local or national) backed by the credit and taxing power of a country with very little risk of default. |||This includes short-term Treasury bills, medium-term Treasury notes, and long-term Treasury bonds.
A division of the U.S. Fixed Income Clearing Corporation (FICC). The GSCC was first established in 1986 to provide clearing and settlement of U.S. government securities. The GSCC handles both new issues and resales of government securities. |||The GSCC compares transactions and acts as the counterparty for settlement purposes for each net position. This is an important role, as it maintains the liquidity and integrity of the market for U.S. government securities.
A foreign loan that must be paid in the currency of a nation that has stability and a reputation abroad for economic strength (a hard currency). |||For example, a loan agreement between a Brazilian company and an Argentinean company where the debt is to be paid in U.S. dollars.
The period in the life of a callable bond in which the issuing company is not permitted to redeem the bond. |||This feature is important for investors purchasing redeemable or callable bonds. Hard call protection acts as sweetener for the bond itself and disallows the issuer from calling the bond under any circumstances.
A bond backed by a pool of mortgages. These bonds are issued by the Federal Home Loan Mortgage Corporation (Freddie Mac). These bonds pay out both interest and principal on a semiannual basis. |||The pool is made up of residential mortgages. If the mortgage is paid off at a faster than anticipated rate, the investor will still receive the entire principal amount of their investment.
A guaranteed income bond (GIB) is an investment tool that provides income in the form of interest over a specified time period, usually between 6 months and 10 years. These bonds are issued by life insurance companies in the United Kingdom and are generally considered a low-risk investment. You can typically choose how frequently you want the payments, such as monthly, quarterly or yearly. |||Guaranteed income bonds provide investors with fixed periodic interest payments so the investor knows what to expect in terms of return on their investment. The initial capital investment is guaranteed to be safe under most circumstances and is returned at the end of the investment period.