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 bond call protection is a type of bond provision that protects investors from the risk of a bond issuer calling a bond before its maturity date. This type of protection is typically found in bonds that have a call provision, which gives the issuer the right to call the bond before its maturity date. … Read more
A Z-Bond is a type of bond that has a coupon rate that is reset periodically based on changes in a reference rate, typically an interest rate index. The reference rate is applied to a notional amount to determine the coupon payments. Z-Bonds are also known as floating rate bonds or variable rate bonds. What … Read more
