Under federal tax law for tax-exempt bonds, the difference between the issue price and par value is treated as tax-exempt interest rather than capital gain.
The total dollar amount of interest over the life of the bonds is adjusted by the amount of premium or discount bid, and then reduced to an average annual rate.
Sector The grouping of securities into a escorts in elmira ny category, based upon similarities that they share.The bond market responds to changing investor needs with frequent innovations.The securities are won and purchased by the underwriter or syndicate of underwriters which submits the best bid according to guidelines in the notice of sale.Leverage The use of borrowed money to increase investing power.Remic (Real Estate Mortgage Investment Conduit) Because of changes in the 1986 Tax Reform Act, most CMOs are now issued in remic form to create certain tax advantages for the issuer.Secured debt Debt backed by specific assets or revenues of the borrower.As noted in the table below, the taxable bond investment with a yield of 4 would, however, provide the investor with only 816 in income after federal taxes (a.7 after-tax yield).(In the US, individual investors can purchase inflation-indexed bonds directly from the Treasury.) What does it cost to buy an RRB?Offering document (prospectus) The disclosure document prepared by the issuer that gives in detail security and financial information about the issuer and the bonds or notes.Industrial revenue bond A security issued by a state, political subdivision or certain agencies or authorities, for certain specific purposes, but backed by the credit of a private enterprise.
Performance An investments return (usually total return compared to a benchmark that is comparable to the risk level or investment objectives of the investment.
The final OS contains the pricing information on the issue that is not contained in the preliminary official statement.
Has same credit characteristics as nonglobal debt but is more easily "cleared" through international clearing facilities.Also known as par value.National Debt Management Agency Top Inflation-linked bonds have an inflation-secured return and are either yearly or zero coupon bonds.True sale An actual sale, as distinct from a secured borrowing, which means that assets transferred to an SPV are not expected to be consolidated with those of the sponsor in the event of the sponsors bankruptcy.Party One of two entities, in a traditional interest rate swap.You can calculate the approximate value of this accrued interest by multiplying the number of days since the last interest payment divided by the number of days in the year, times the coupon rate, times the index ratio.Scale Listing by maturity of the price or yields at which a new issue will be offered.As with all bonds, a sales commission is built into the spread between the price you pay to buy a bond and the price you get when you sell the same bond.
Short Borrowing and then selling securities that one does not own, in anticipation of a price decline.
Yield is the rate of return on a bond investment.
Long-term capital gains which require you to have held the investment for 12 months before selling resulting from the sale of tax-exempt municipal bonds are currently taxed at a maximum rate.
For every 1,000 face value you'll receive an interest payment of 1,000 times half the coupon rate (e.g.