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Financial Terms | |
Tranche |
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Definition of TrancheTrancheOne of several related securities offered at the same time. tranches from the same offering usually
Related Terms:Bull-bear bondBond whose principal repayment is linked to the price of another security. The bonds are Collateralized mortgage obligation (CMO)A security backed by a pool of pass-throughs , structured so that Dual syndicate equity offeringAn international equity placement where the offering is split into two Stated maturityFor the CMO tranche, the date the last payment would occur at zero CPR. Accrual bondA bond on which interest accrues, but is not paid to the investor during the time of accrual. Accumulated Benefit Obligation (ABO)An approximate measure of the liability of a plan in the event of a Alternative mortgage instrumentsVariations of mortgage instruments such as adjustable-rate and variablerate ![]() BearAn investor who believes a stock or the overall market will decline. A bear market is a prolonged period Bear marketAny market in which prices are in a declining trend. bear marketA market in which stock or bond prices are generally Bear MarketA prolonged period of falling stock market prices. Bear raidA situation in which large traders sell positions with the intention of driving prices down. Bearer bondbonds that are not registered on the books of the issuer. Such bonds are held in physical form by Bondbonds are debt and are issued for a period of more than one year. The U.S. government, local BONDA long-term, interest-bearing promissory note that companies may use to borrow money for periods of time such as five, ten, or twenty years. BondA long-term debt instrument in which the issuer (borrower) is ![]() bondSecurity that obligates the issuer to make specified payments BondA financial asset taking the form of a promise by a borrower to repay a specified amount (the bond's face value) on a maturity date and to make fixed periodic interest payments. BondUsually a fixed interest security under which the issuer contracts to pay the lender a fixed principal amount at a stated date in the future, and a series of interest payments, either semi-annually or annually. Interest payments may vary through the life of bond. bondA debt security issued by a government or company. You receive regular interest payments at specified rates while you hold the bond and you receive the face value when it matures. Short-term bonds mature in less than five years; medium-term bonds mature in six to ten years; and long-term bonds mature in eleven years or greater. BondFixed interest security issued by a corporation or government, having a specific maturity date. Bond agreementA contract for privately placed debt. Bond covenantA contractual provision in a bond indenture. A positive covenant requires certain actions, and Bond-equivalent basisThe method used for computing the bond-equivalent yield. Bond equivalent yieldbond yield calculated on an annual percentage rate method. Differs from annual Bond-equivalent yieldThe annualized yield to maturity computed by doubling the semiannual yield. Bond Equivalent Yieldbond yield calculated on an annual percentage rate method ![]() Bond indentureThe contract that sets forth the promises of a corporate bond issuer and the rights of Bond indexingDesigning a portfolio so that its performance will match the performance of some bond index. Bond pointsA conventional unit of measure for bond prices set at $10 and equivalent to 1% of the $100 face Bond valueWith respect to convertible bonds, the value the security would have if it were not convertible BONDPARA system that monitors and evaluates the performance of a fixed-income portfolio , as well as the Bonds payableAmounts owed by the company that have been formalized by a legal document called a bond. Brady bondsbonds issued by emerging countries under a debt reduction plan. BullAn investor who thinks the market will rise. Related: bear. Bull CD, Bear CDA bull CD pays its holder a specified percentage of the increase in return on a specified Bull marketAny market in which prices are in an upward trend. bull marketA market in which stock or bond prices are generally rising. Bull MarketA prolonged period of rising stock market prices. Bull spreadA spread strategy in which an investor buys an out-of-the-money put option, financing it by Bulldog bondForeign bond issue made in London. Bulldog marketThe foreign market in the United Kingdom. Bullet contractA guaranteed investment contract purchased with a single (one-shot) premium. Related: Bullet loanA bank term loan that calls for no amortization. Bullet strategyA strategy in which a portfolio is constructed so that the maturities of its securities are highly Bullish, bearishWords used to describe investor attitudes. bullish refers to an optimistic outlook while Callable bondA bond that allows the issuer to buy back the bond at a callable bondbond that may be repurchased by the issuer before maturity at specified call price. Canada Savings BondsA bond issued each year by the federal government. These bonds can be cashed in at any time for their full face value. Closed-end mortgagemortgage against which no additional debt may be issued. Collateral trust bondsA bond in which the issuer (often a holding company) grants investors a lien on Commercial MortgageA loan made on real estate collateral, other than a residential property, in which a mortgage is given to secure payment of principal and interest. Completion bondingInsurance that a construction contract will be successfully completed. Conflict between bondholders and stockholdersThese two groups may have interests in a corporation that Conventional mortgageA loan based on the credit of the borrower and on the collateral for the mortgage. convertible bondbond that the holder may exchange for a specified number of shares. Convertible bondsbonds that can be converted into common stock at the option of the holder. Convertible eurobondA eurobond that can be converted into another asset, often through exercise of Corporate bondsDebt obligations issued by corporations. Coupon BondAny bond with a coupon. Contrast with discount bond. Cushion bondsHigh-coupon bonds that sell at only at a moderate premium because they are callable at a Debenture bondAn unsecured bond whose holder has the claim of a general creditor on all assets of the Deep-discount bondA bond issued with a very low coupon or no coupon and selling at a price far below par Discount bondDebt sold for less than its principal value. If a discount bond pays no interest, it is called a Discount BondA bond with no coupons, priced below its face value; the return on this bond comes from the difference between its face value and its current price. Dollar bondsMunicipal revenue bonds for which quotes are given in dollar prices. Not to be confused with Dollar price of a bondPercentage of face value at which a bond is quoted. Equivalent bond yieldAnnual yield on a short-term, non-interest bearing security calculated so as to be EurobondA bond that is (1) underwritten by an international syndicate, (2) offered at issuance EurobondA debt security issued in a market other than the home market of eurobondbond that is marketed internationally. Eurodollar bondsEurobonds denominated in U.S.dollars. Euroyen bondsEurobonds denominated in Japanese yen. Extendable bondbond whose maturity can be extended at the option of the lender or issuer. Fixed-dollar obligationsConventional bonds for which the coupon rate is set as a fixed percentage of the par value. Flower bondGovernment bonds that are acceptable at par in payment of federal estate taxes when owned by Foreign bondA bond issued on the domestic capital market of anther company. Foreign bond marketThat portion of the domestic bond market that represents issues floated by foreign Freddie Mac (Federal Home Loan Mortgage Corporation)A Congressionally chartered corporation that Full coupon bondA bond with a coupon equal to the going market rate, thereby, the bond is selling at par. Full faith-and-credit obligationsThe security pledges for larger municipal bond issuers, such as states and GEMs (growing-equity mortgages)mortgages in which annual increases in monthly payments are used to General obligation bondsMunicipal securities secured by the issuer's pledge of its full faith, credit, and Global bondsbonds that are designed so as to qualify for immediate trading in any domestic capital market GMCs (guaranteed mortgage certificates)First issued by Freddie Mac in 1975, GMCs, like PCs, represent Government bondSee: Government securities. Government National Mortgage Association (Ginnie Mae)A wholly owned U.S. government corporation Graduated-payment mortgages (GPMs)A type of stepped-payment loan in which the borrower's payments High-coupon bond refundingRefunding of a high-coupon bond with a new, lower coupon bond. High-yield bondSee:junk bond. Income bondA bond on which the payment of interest is contingent on sufficient earnings. These bonds are Indexed bondbond whose payments are linked to an index, e.g. the consumer price index. Industrial revenue bond (IRB)bond issued by local government agencies on behalf of corporations. Insured bondA municipal bond backed both by the credit of the municipal issuer and by commercial Insured MortgageAn insured mortgage protects only the mortgage lender in case you do not make your mortgage payments. This coverage is provided by CMHC [Canada mortgage and Housing Corporation] and is required if a person has a high-ratio mortgage. [A mortgage is high-ratio if the amount borrowed is more than 75% of the purchase price or appraised value, whichever is less.] International bondsA collective term that refers to global bonds, Eurobonds, and foreign bonds. Investment grade bondsA bond that is assigned a rating in the top four categories by commercial credit Junk bondA bond with a speculative credit rating of BB (S&P) or Ba (Moody's) or lower is a junk or high junk bondbond with a rating below Baa or BBB. Level-coupon bondbond with a stream of coupon payments that are the same throughout the life of the bond. Limited-tax general obligation bondA general obligation bond that is limited as to revenue sources. Long bondsbonds with a long current maturity. The "long bond" is the 30-year U.S. government bond. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |