Liberty Bonds were issued by the US Treasury to finance World War I and later the reconstruction of areas affected by the 9/11 terrorist attacks. The first bond was not successful, but advertising campaigns and higher interest rates led to increased sales. The bonds were a way for citizens to contribute to the war effort […]
Inflation-protected Treasury notes (TIPs) protect investors from inflation and are sold through Treasury auctions or brokers. The principal increases with the consumer price index, but there is a trade-off for a lower yield. TIPs mature in 5, 10, or 20 years and are subject to federal income tax. Upon maturity, the principal is automatically deposited […]
The Yankee Bond Market allows US investors to participate in deals with foreign entities. The Securities Act of 1933 sets standards for foreign corporations to issue bonds in the US, and debt rating agencies assess their creditworthiness. The market may not be accessible to small investors, but offers opportunities for large ones. The US bond […]
Index bonds have no maturity date and their value is determined by the current index rate. They can be open or closed and tax-exempt or taxable. They can be risky investments, but can be held for more than ten years. The minimum investment is $1,000 and can be purchased through approved agencies or brokers. Many […]
Tax-exempt bonds include municipal bonds and Treasury bonds. Municipal bonds are issued by local or state government agencies and can be general obligation or income bonds. Treasury bonds are issued by the US government and are considered risk-free. Bond ratings range from Aaa to D, with D being in default. Call provisions allow for tax-free […]
Secured mortgage bonds are a separate entity used to manage debt, taking ownership of debts including mortgages. The combined mortgage pool forms the basis for investors to purchase bonds, known as tranches, with a defined set of rules. This type of finance is associated with high-priced properties and used by banks, insurance companies, hedge funds, […]
Bonds are debt instruments used by governments and companies to raise funds for projects. The level of risk and yield varies depending on the type of bond, with bond insurance reducing principal risk and potentially lowering yields. Bond insurers are private investment firms or insurance companies, and their credit ratings are important to investors. A […]
Emerging market bonds are a type of corporate bond issued by companies in nations known as emerging markets, such as the BRIC countries. Investors hope to reap large returns based on future economic growth, but caution is advised due to the risk of default and lack of regulation. Other investment options in emerging markets include […]
Dragon bonds are long-term debt obligations issued by Asian nations in foreign currency, attracting foreign investment. China is a major producer of such investments, which can finance various assets. Investors can hold or sell them on the secondary market, but they pose risks. Dragon bonds can attract foreign investors and provide a method to finance […]
A bond bank buys municipal bonds from local government entities and uses the proceeds to support its own bond issues, benefiting both parties. It can work with school districts, state agencies, and local jurisdictions to finance projects. Bond banks can be established at the state level and must comply with banking laws and regulations. A […]
Municipal bond insurance protects investors who purchase bonds issued by government agencies. Issuers buy insurance to raise bond ratings, making them more attractive to investors. The US has a developed market, while Canada guarantees municipal bonds, and Europe has experienced growth. There are two types of bonds: general and tax. Bond insurance benefits insurers with […]
Surety bond companies provide protection against financial loss caused by a debtor, and require proof of trustworthiness from the obligated party. Different types of bonds are available for various obligations and parties involved, and not all bail agents offer all forms of bail. A surety bond company provides protection in case of loss, just like […]
Bond yield is the return on investment or interest earned on a bond. High yield bonds offer higher returns. Calculating the yield considers the price paid, face value, and interest payments. Yield to maturity is calculated using a calculator. Buying at a discount yields more than face value, while buying at a premium yields less. […]
Cash for bond loans allow investors to receive a cash loan by pledging bond issues as collateral. The borrower cannot sell the bonds without permission until the loan is repaid. This type of lending is common with the Federal Reserve Bank in the US and offers benefits for both borrowers and lenders. Cash for bond […]
A bond power of attorney is a legal form used to transfer ownership of registered bonds without requiring the approval of the bond certificate. It includes information about the current and new bondholder, the transfer date, and a description of the bond being transferred. The document also ensures that the new owner has the same […]
A collateralized bond obligation (CBO) is a bond backed by a pool of junk bonds, but is intended to be investment grade. The varying levels of credit quality of bond funding provide overall stability to the backstop, and the interest rates are usually credible. The risk is minimal, making it an attractive option for smaller […]
Registered bonds have a record of the bond owner, unlike bearer bonds, and can be physical or electronic. They provide stability for investors and allow issuers to know who owes payments. They also prevent duplication and theft. A registered bond is a bond that has been issued to an investor and includes some type of […]
A financial institution bond provides insurance for banks to protect against losses caused by employee or external actions. Basic coverage includes protection for the bank’s property, items lost during transit, and losses from counterfeit money or internal sabotage. Optional coverage includes protection for unauthorized use of credit and debit cards, data loss, and loss of […]
Bonds are debt instruments issued by governments and companies, with factors such as creditworthiness, term, and characteristics affecting their present value. Credit rating agencies assess issuers’ financial health, with high-risk bonds paying higher interest rates. Bond prices can fluctuate based on interest rate movements, call options, and conversion options. Bonds are debt instruments that can […]
Term bonds are single maturity date bonds issued by municipalities or corporations, making bond management simple. Investors pay taxes on dividends earned at maturity, and the bonds can be called or converted before maturity. Term bonds are new bonds issued by a municipality and have a single maturity date. The term bond may be issued […]
