Sentences with phrase «as a discount bond»

This bond is referred to as a discount bond.

However, the chances of default might be higher, as a discount bond can indicate that the lender is in a less than ideal place in the market or will likely be in the future.

Not exact matches

Most likely, the manager will be forced to sell some bonds, potentially at a discount, as the fund needs to simply raise cash to meet redemptions.

Although the retailers have been negotiating with bond holders, who have accepted significant discounts and offered longer terms, the basic financials are enough for Moody's to rate 13.5 percent of the retailers it follows as a Ca or Caa credit risk.

The assumed discount rate utilized is based on a broad sample of Moody's high quality corporate bond yields as of the measurement date.

a bond where no periodic interest payments are made; the investor purchases the bond at a discounted price and receives one payment at maturity that usually includes interest; they have higher price volatility than coupon bonds as a result of interest rate changes

If you buy a bond for less than face value on the secondary market (known as a market discount) and you either hold it until maturity or sell it at a profit, that gain will be subject to federal and state taxes.

As discussed in our post, «How New Constructs» Discounted Cash Flow Model Works,» stock valuations and bond valuations can be understood in the same way.

These securities are known as Original Issue Discount (OID) bonds, since the difference between the discounted price at issuance and the face value at maturity represents the total interest paid in one lump sum.

For 2014, Humana discounted from its EPS calculation losses from paying down some bonds, even as its overall debt levels increased.

It's defined as the weighted average of the payments an investor will receive over time, discounted to the bond's present value.

As rates headed higher, investors sold off municipal bonds, pushing the largest municipal bond fund, iShares National AMT - Free Muni Bond ETF (MUB), to its biggest discount in histbond fund, iShares National AMT - Free Muni Bond ETF (MUB), to its biggest discount in histBond ETF (MUB), to its biggest discount in history.

If you buy a discount bond, the chances of seeing the bond appreciate in value are fairly high, as long as the lender doesn't default.

If you compare European stock valuations with other asset classes, such as bonds, or with US or Asian stock valuations, Europe is trading at a discount.

Thinking that you have a deferred guaranteed annual income stream is decieving as the issuer can call the bonds and will discount the bond at a much higher rate than the coupon interest rate.

As was mentioned above, when a bond is priced at a discount from par, its interest rate will be greater than the coupon rate.

If governments had followed a formula like «use the Long Baa bond yield for the discount rate,» they would not have been as generous with pensions.

The BMO Discount Bond (ZDB), launched in February, is similar to traditional broad - market bond ETFs, such as the iShares Canadian Universe Bond (XBB), the Vanguard Canadian Aggregate Bond (VAB) and the BMO Aggregate Bond (ZBond (ZDB), launched in February, is similar to traditional broad - market bond ETFs, such as the iShares Canadian Universe Bond (XBB), the Vanguard Canadian Aggregate Bond (VAB) and the BMO Aggregate Bond (Zbond ETFs, such as the iShares Canadian Universe Bond (XBB), the Vanguard Canadian Aggregate Bond (VAB) and the BMO Aggregate Bond (ZBond (XBB), the Vanguard Canadian Aggregate Bond (VAB) and the BMO Aggregate Bond (ZBond (VAB) and the BMO Aggregate Bond (ZBond (ZAG).

Ten points (the entire amount of market discount) are taxed as ordinary income in the year the bond is redeemed.

Under current law, accreted market discount is taxed as ordinary income at the time a bond is sold or redeemed.

Because the amount of market discount, two points, is less than the de minimis amount (which in this case is 2.5 points, or 0.25 percent of the face value of a bond times the number of years between the bond's acquisition and its maturity), the market discount is considered to be zero and the difference between purchase price and sales price or redemption is generally treated as a capital gain upon disposition or redemption.

If a tax - exempt bond is originally issued at a price less than par (as distinguished from a subsequent sale of a previously - issued bond), the difference between the issue price of such bond and the amount payable at the maturity of the bond is considered «original issue discount» (OID).

In order to determine the constant yield to maturity on a bond, it is necessary to determine a constant discount rate that must be applied to each and every payment on the bond (principal and interest) in order to produce an aggregate value (as of the issue date) that is equal to the issue price of the bond.

As with other tax - exempt securities, market discount on OID bonds is accreted from the date the bond is purchased to the maturity date.

Accreted market discount is taxed as ordinary interest income in the year a bond is sold, redeemed or transferred.

Accreted market discount must be included as ordinary, taxable income in the year a bond is sold, redeemed or otherwise disposed of.

The yield - to - maturity is the interest rate — known as a discount rate — that sets the present value of the bond equal to its current price.

Accreted market discount is taxed as ordinary income at the time a bond is sold or redeemed.

As credit risk and interest rates change, bonds can be bought or sold at a discount or premium to par value.

The presence of discount bonds can indicate many things, such as predictions of falling dividends or a reluctance to buy on the part of the investors.

If you buy a discount bond, the chances of seeing the bond appreciate in value are fairly high, as long as the lender doesn't default.

Some short - term bonds, such as the U.S. Treasury bill, are always issued at a discount, and pay par amount at maturity rather than paying coupons.

These discounts are used to entice buyers into purchasing lower - interest bonds, and may be seen as critical to the successful sale of zero - coupon bonds.

As for Bill Gross, the king of the bond kings, he recommends buying municipal bonds funds that trade at a discount of at least 10 % to net asset value (NAV) and a 5 % yield or higher.

As a result, bond ETFs tend to experience more premiums and discounts, or deviation between the closing ETF price and the closing NAV.

He was able to offer a wrap account for a percentage of my holdings and he said that they could offer some products (bonds, new issues, flow thoughs) for the same cost as the online broker but, overall his advice was that I still needed the online discount broker account.

As a result, a discount rate that is higher is required which in turn decreases the pricing of the bond.

IRS regulations require cost basis adjustments for bonds bought at a premium or discount, as well as original issue discount (OID) debt.

Or they had a built - in margin of safety, such as property and casualty insurance businesses where you were in effect buying a bond portfolio at a discount to book, had the benefit of investing the premium float, had a necessary product (automobile insurance) and again did not need a lot of capital investment.

If inflation expectations are high, then bond yields rise relative to the earnings yield as inflation is theoretically neutral to the earnings yield (both future earnings and the discount rate increase).

We use the current 30 - year Treasury bond rate as the discount rate throughout FinAid because it is a conservative figure, is risk - free, and it is the discount rate typically used by banks for economic analysis of loan programs.

Trading individual bonds has gotten a lot easier recently than it once was, thanks to discount brokerage platforms that have broadened beyond stocks to cover bonds as well.

okay here's my two cents worth folks im up for renewal and have just nagotiated a rate 5 yr variable1.75 persent or if i want a five yr fixed at 4.49 still quite a gap between fixed and variable here i believe i have a little lee way here apparently i was only interesed in variable and five yr fixed but i made it absulutly apparent to them that when lock in from a variable i get the whosale discounted rate at that time and written into the contract i kinda believe this the way the market is heading as we head out of ressesion and the bank of canada is going to make there move i believe coming up in june and just to make this firm i do not believe the boc will raise rates in fast mode far from it will be slow process i don't care what the ecconmists are thinking we have to remember manufactering sector is reallt taking a hit on the high dollar and don't forget our niegbours to the south how dependent our canada is with them i believe it will be a slow process a lot of people heve put themselves in a debt load over these enormously low interest rates but i may be wrong i think a variable is the way to go if you want to work on that princibal at least should i say the say the short to medium term and betting that the bond markets stay put for the short to medium term - i have given enough interest to the banks maybe i can pay a little less at least fot the short to mediun term here i have not completly decided yet put i think im going variable although i wish my mtge was up a year ago that would have been just great congradulations to all that did.

Next, if general rates drop, say to 2.95 %, and you discount each of the 21 future payments, you'll get a number higher than $ 1000, and the bond price will be quoted as 101.00 or in that range.

Perhaps even more importantly, the risk premium as measured by the monthly return of the S&P 500 TR minus the S&P 500 Bond Index was negative (in other words was a discount) back in August 2017 that showed pessimism in the market, despite a positive stock market return.

As for tips and index bond funds you want to acquire when they are discounted and not pay a premium.

In this case, the discount bond (from above) will be worth less to the buyer, as shown below.

Zeros are issued at a discount and mature at par value, and the amount of the spread is divided equally among the number of years to maturity and taxed as interest, just as any other original issue discount bond.

This nugget of tax law states that if you purchase a bond at a discount and the discount is equal to or greater than a quarter point per year until maturity, then the gain you realize at redemption of the bond (par value minus purchase price) will be taxed as ordinary income, not as capital gains.

Individuals may purchase bonds from a number of sources, such as full - service brokerage firms, banks or firms that specialize in debt instruments, and discount brokers.