Sentences with phrase «coupons than corporate bonds»
Namely, bond coupon payments are determined by market interest rates, the type of issuing entity (government bonds pay lower coupons than corporate bonds because of lower default risk), the creditworthiness of the issuing entity (AAA companies pay lower coupons than CCC companies), and the maturity of the bond, which we will talk about next.
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3 The iBoxx US dollar corporate bond index, for example, comprises more than 4,200 bonds from 1,200 issuers (associated with 900 companies), all with varying credit ratings, coupons and other structural features; see Tierney and Thakkar (2015).
You will also find higher coupon rates on corporate bonds than on U.S. treasury bonds with comparable maturities.
Most Municipal bonds are exempt from federal and state taxation, so their coupon rate is typically lower than both Corporate and Treasury bonds, presuming the Municipal bond issuer has a solid credit rating.
Premium refers to a price above the par value (price at maturity) and the interest rate is lower than the coupon of the bond at par.E.g.: Company ABC Corporate 2015 6.50 trading at $ 105 (6.20 % yield).
Corporate bonds pay a higher interest rates (or «coupon») so these bonds are repaid quicker than government bonds, which pay a lower interest rate.
Discount refers to a price below the par value (price at maturity) and the interest rate is higher than the coupon of the bond at par.E.g.: Company XYZ Corporate 2015 6.50 trading at $ 95 (6.84 % yield).
Income, Yield and Duration: Investment grade municipal bonds on average have a higher coupon cash flow to bondholders than corporate bonds and that cash flow is exempt from federal taxation.