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Home Dictionary N Non-Competitive Tender An out-of-competition tender is an offer to purchase Treasury securities made by smaller investors. In non-competitive bidding, neither the price nor the terms of the security are specified. Instead, terms are set through a competitive bidding process between large institutional buyers. Investors can use non-competitive trading to buy $10,000 to $500,000 in one-time Treasury securities. Accretion of Discount
September 25, 2022 Increasing discount refers to an increase in the value of a discount security as it approaches its maturity date. Average Life
September 25, 2022 Average life is the average length of time it takes to pay off the outstanding principal on a debt instrument, such as a treasury bill, bond, loan, or mortgage-backed security. Barbell
September 25, 2022 Barbell is a portfolio strategy with a fixed income, in which half of the investments are short-term instruments, and the other half are long-term. Debt Security
September 25, 2022 Debt securities are financial assets that entitle their holders to a stream of interest payments. Floating Charge
September 25, 2022 A floating fee is a security interest or lien over a group of non-permanent assets that fluctuate in quantity and value. Humped Yield Curve
September 25, 2022 A humped yield curve occurs when medium-term interest rates are higher than both short-term and long-term rates. Liquidity Preference Theory
September 25, 2022 Liquidity preference theory refers to the demand for money as measured by liquidity. Negative Arbitrage
September 25, 2022 Negative arbitrage is the lost profits of holding debt proceeds in escrow until the project can actually be funded. Negative Bond Yield
September 25, 2022 Negative bond yield is when an investor receives less money on redemption of the bond than the original purchase price of the bond. Realized Yield
September 25, 2022 Realized yield is the actual profit earned during the investment’s holding period and may include dividends, interest payments, and other cash payments. Reinvestment Rate
September 25, 2022 The reinvestment rate is the return that an investor expects to receive after reinvesting cash flows received from previous investments. Unsecured Note
September 25, 2022 An unsecured bond is corporate debt that does not come with collateral and therefore represents a riskier prospect for the investor. Variable Coupon Renewable Note (VCR)
September 25, 2022 Revolving debt with a variable coupon is repaid every week, with the principal reinvested at a new interest rate, which is reset at a fixed spread relative to the base rate. Weighted Average Remaining Term (WART)
September 25, 2022 The weighted average remaining term (WART) is a measure of the average time to maturity of a fixed income portfolio. Workout Period
September 25, 2022 An adjustment period occurs when the price or yield of a bond is adjusted so that it is more in line with similar bonds in the market. Yield Basis
September 25, 2022 The yield-based method specifies the price of a fixed income security (such as a bond) as a percentage of yield rather than in dollars. Zero-Coupon Certificate Of Deposit (CD)
September 25, 2022 A zero-coupon deposit is a type of certificate of deposit that pays no interest for the duration of its validity. Zero-Coupon Convertible
September 25, 2022 A zero-coupon convertible bond is a convertible bond issued by a corporation that does not pay regular interest to the bondholders. Agency Bond
September 25, 2022 Federal government bonds and government-sponsored corporate bonds pay slightly higher interest rates than US Treasury bonds. Asset-Backed Commercial Paper (ABCP)
September 25, 2022 Asset-backed commercial paper (ABCP) is a type of short-term investment with a maturity of 270 days or less. Baby Bond
September 25, 2022 A baby bond is a bond with a par value of less than $1,000. Bearer Bond
September 25, 2022 A bearer bond is a physical certificate with coupons attached that is used to pay off interest payments. Bill Auction
September 25, 2022 Treasury bills are issued through an electronic bill auction held by the government every week. Bond Covenant
September 25, 2022 The Bond Agreement establishes certain actions to be taken or prohibited by the bond issuer. Bond Rating Agencies
September 25, 2022 Bond rating agencies are companies that assess the creditworthiness of both debt securities and their issuers.