A medium-term note (MTN) is a debt instrument that is typically issued with a term of 5 to 10 years. MTNs are generally issued by large banks or corporations and are often used to raise capital for a variety of purposes, including funding capital expenditures, working capital, or acquisitions. MTNs are typically issued in large … Read more
A bull steepener is a type of bond market yield curve that slopes upward from shorter- to longer-dated maturities. This shape indicates that yields on shorter-dated bonds are lower than those on longer-dated bonds, which is typical during periods of economic expansion. A bull steepener can also be created by a shift in the yield … Read more
A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality but differing maturity dates. The most frequently reported yield curve is based on the interest rates of U.S. Treasury securities. This yield curve is used as a benchmark for other debt instruments … Read more
A Guaranteed Income Bond (GIB) is a type of fixed income investment that provides the investor with a guaranteed stream of income for a set period of time. The income from a GIB is often paid out monthly, making it a popular choice for retirees or other investors who are looking for a predictable source … Read more
A Dim Sum bond is a bond issued in the Chinese yuan by a non-Chinese company. The name “Dim Sum” comes from the Cantonese word for “touch heart,” which describes the small, bite-sized servings of food that are traditionally served at Chinese teahouses. These bonds are usually issued in Hong Kong and are used to … Read more
The Preferred Habitat Theory is an investment theory that suggests that investors have a preference for investing in assets that are located in their home country. This theory is based on the idea that investors are more familiar with the political and economic conditions of their home country, and as a result, they feel more … Read more
A collateralized bond obligation (CBO) is a type of structured finance security. It is created by pooling together a group of bonds and other debt instruments, and then dividing the resulting pool into tranches. The bonds in the pool serve as collateral for the CBO. The CBO structure allows the issuer to sell different tranches … Read more
Warehousing is the process of holding a security or commodity in inventory in order to sell it at a later date. A security or commodity may be warehoused for a number of reasons, such as to meet future customer demand or to take advantage of seasonal price fluctuations. In the case of commodities, warehousing may … Read more
A secured bond is a type of debt instrument that is backed by some form of collateral. This collateral can take the form of real estate, cash, or other assets. The key feature of a secured bond is that the issuer has the right to seize the collateral if the borrower defaults on the loan. … Read more
A war bond is a debt security issued by a government to finance military operations during wartime. War bonds are usually issued in denominations of $25, $50, $100, $500, and $1,000, and typically have maturities of 10 to 40 years. Interest on war bonds is usually lower than that of other government bonds, because the … Read more
