Term
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Definition
Most corporate bonds are term bonds; they run for a term of years then cbecome due and payable.
Term bonds are often referred to as bullet-maturity or Bullet Bonds. |
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Term
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Definition
| The promises of corporate bond issuers and the rights of investors who buy them are set forth in great detail in contracts called bond indentures. |
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Term
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Definition
| some corporate bond issues are so arranged that specified principal amounts become due on specified dates prior to maturity. |
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Term
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Definition
| a mortgage bond grants the bondholders a lien against the pledged assets. a lien is a legal right to sell mortgaged property. |
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Term
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Definition
| to satisfy the desire of bondholers for security, the holding companies pledge stocks notes bonds or whatever other kind of financial instruments that they own. These assets are termed collateral (personal property) and bonds secured by such assets are called collateral trust bonds. |
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Term
equipment trust certificates
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Definition
| certificates given out by companies to pay the manufacturer for equipment borrowed. |
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Term
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Definition
is not secured by a specific pledge of property;
Debenture bondholders have the claim of general creditors on all assets of the issuer not pledged spefically to secure other debt. |
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Term
| subordinated debenture bond |
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Definition
| is an issue that ranks after secured debt, after debenture bonds, and often after some general creditors in its claim on assets and earnings. |
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Term
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Definition
| an obligation guatanteed by another entity. |
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Term
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Definition
| this provision denies the issuer the right to tredeem bonds during the first 5-10 years following the date of issue with proceeds received from teh sale of lower cost debt obligations that have an equal or superior rank to the debt to be redeemed. |
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Term
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Definition
| if the issuer has the coice to retire all or part of an issue prior to maturiy, the buyer of the bond takes the chance that the issue will be called away at a disadvantageous time. |
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Term
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Definition
| corporate bond indentures may require the issuer to retire a specified portion of an issue each year. |
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Term
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Definition
| a corporate bond with a call option to buy the common stock of the issuer |
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Term
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Definition
| grants the bondholder the right to exchange the bonds for the common stock of a firm other than the issuer of the bond. |
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Term
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Definition
| A warrant grants the holder the right to purchase a designated security at a specified price from the issuer of the bond. |
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Term
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Definition
| grants the bondholder the right to sell the issue back to the issuer at par value on designated dates. |
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Term
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Definition
| The coupon interest on floating rate securities is reset periodically to follow changes in the level of some predetermined benchmark rate. |
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Term
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Definition
| bond issues that are assigned a rating in the top four categories are referred to as investment-grade bonds. |
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Term
| high yield bonds or junk bonds |
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Definition
| these are issues that carry a rating below the top four categories. |
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Term
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Definition
| A new company took on a substantial amount of debt to finance the acquisition of the firm. |
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Term
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Definition
| is the risk associated with operating cash flows |
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Term
| corporate governance risk |
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Definition
| the eagerness of corporate management to present favorable results to shareholders and the market has been a major factor in several of the corporate scandals in recent years and is what is referred to as corporate governance risk. |
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Term
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Definition
| this analysis involves traditional ratio analysis and other factors affecting the firms financing |
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Term
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Definition
| the recovery ratings were for secured debt. |
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Term
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Definition
| issues that have been downgraded for other reasons other than a leveraged buyout or a recapitalization |
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Term
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Definition
| most common type of deferred coupon structure. these bonds sell at a deep discount and do not pay interest for an initial period, typically from 3-7 years. |
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Term
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Definition
| these pay coupon interest, but the coupon rate is low for an inital period and then increases to a higher coupon rate. |
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Term
payment in kind bonds (PIK)
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Definition
| give the issuer an option to pay cash a a coupon payment date or give the bondholder a similar bond. |
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Term
| Trade reporting and compiance engine (TRACE) |
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Definition
| requires that all broker-dealers who are NASD member firms report transactions in corporate bonds to TRACE. |
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Term
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Definition
allow market participants to conduct electronic auctions of securities offerings for both new issues in the primary markets and secondary market offerings.
not typically used |
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Term
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Definition
| bring dealers and institutional investors together in electronic trading networks that provide real time or periodic cross matching sessions. |
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Term
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Definition
| allow dealers to execute transactions electronically with other dealers via the anonymous services of broker brokers |
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Term
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Definition
| allow customers with consolidated orders from two or more dealers the ability to execute from among multiple quotes. these are also called client to dealer systems |
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Term
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Definition
| permit investors to execute transactions directly with the specific dealer desired. |
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Term
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Definition
the eurobond sector of the global bond market includes bonds with several distinguishing features.
1. they are underwritten by an international syndicate
2. at issuance they are offered simultaneously to investors in a number of countries
3. they are issued outside the jurisdiction of any single country
4. they are in unregistered form |
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Term
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Definition
| some issues that are the "plain vanilla" fixed coupon bonds |
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Term
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Definition
| they pay coupon interest in once currency bu the principal in a different currency. |
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Term
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Definition
| is a class of stock, not a debt instrument, but it shares characteristics of both common stock and debt. |
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Term
| noncumulative preferred stock. |
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Definition
| if a dividend payment is missed and the security holder must forgo the payment. |
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Term
| cumulative preferred stock. |
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Definition
| the divdend payment can accrue until it is fully paid |
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Term
| perpetual preferred stock |
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Definition
| preferred stock may be issued without a maturity date |
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Term
| adjustable rate preffered stock (arps) |
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Definition
| is fixed quarterly and based on a predetermined spread from the highest of three points on the treasury yield curve. |
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Term
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Definition
| the dividend rate on APS is set periodically, as with ARPS but it is established through an auction process. |
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Term
| remarkted preferred stock |
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Definition
| the divdent rate is determined periodally by a remarketing agent who resets the divdend rate |
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Term
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Definition
| is the principle that senior creditors are paid in full before junior creditors are paid anything |
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Term
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Definition
| a company that files for protection under the bankruptcy act |
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