The term “Bid Wanted In Competition (BWIC)” is used when an institution wants to sell a large block of bonds and solicits bids from a number of dealers. The institution will usually specify the minimum amount they are willing to accept for the bonds, and the dealers will then submit their bids. The institution will … Read more
Yield maintenance is a type of prepayment penalty that is designed to protect the investor from losing interest payments if the borrower decides to refinance the loan. The penalty is calculated based on a percentage of the outstanding loan balance and is typically paid at the time of refinancing. Why Is prepayment a risk? Prepayment … Read more
TIBOR stands for Tokyo Interbank Offered Rate. It is the Japanese equivalent of LIBOR, and is the rate at which banks offer to lend money to each other in the Tokyo interbank market. What is 7day libid? The 7day libid is a way to measure the amount of interest that an investor has in a … Read more
In finance, a fallen angel is a bond that has been downgraded by a rating agency. Once a bond is downgraded, it typically becomes more difficult to sell and may trade at a discount to its original price. Fallen angels are often seen as a sign of financial distress, and may be an early warning … Read more
Sharia-Compliant Bond-Like Financial Instruments. A Sukuk is a Sharia-compliant bond-like financial instrument that is used to raise capital. Sukuk are structured in a way that complies with the principles of Islamic finance, which prohibit the payment of interest. Instead of paying interest, Sukuk holders receive periodic payments that are based on the underlying assets that … Read more
Mumbai Interbank Offered Rate (MIBOR) is the rate at which banks offer to lend funds to one another in the interbank market in Mumbai. It is used as a benchmark for short-term interest rates in the Indian financial market. MIBOR rates are set daily by the Fixed Income Money Market & Derivatives Association of India … Read more
A catastrophe bond, also known as a CAT bond, is a type of bond that pays out in the event of a natural disaster. The bonds are typically issued by insurance companies and are used to transfer the risk of a natural disaster from the issuer to the investors. If a natural disaster occurs, the … Read more
A convertible debenture is a type of bond that can be converted into shares of common stock in the issuing company. Convertible debentures are typically issued by young, fast-growing companies that are looking to raise capital without giving up equity in the company. The key benefit of a convertible debenture is that it allows the … Read more
A debt/equity swap is a type of financial transaction in which a company swaps its debt for equity in another company. This can be done to reduce the amount of debt the company has on its balance sheet, or to raise capital for the company. There are a few different types of debt/equity swaps that … Read more
A credit market is a market in which debt securities are traded. Debt securities are securities that represent a loan that must be repaid by the borrower with interest. The credit market includes both the bond market and the lending market. The bond market is the market for debt securities that are issued by governments … Read more
