561 entries
Fixed income
Treasury securities, corporate bonds, structured credit, money-market instruments, credit ratings.
- How Investment-Grade Bond Spreads Over Treasuries Work Learn how corporate bond spreads over Treasuries are quoted, what drives them wider or tighter, and what they signal about credit risk.
- How Issuers Can Appeal a Credit Rating Decision Credit rating agencies permit issuers to formally appeal a credit rating downgrade or initial rating, presenting new evidence or disputing methodology.
- How Long Does a Credit Rating Change Take Timeline from rating review to published action, including watch periods, comment phases, and expedited crises reviews.
- How Municipal Bonds Are Taxed at the State Level Federal exemption does not guarantee state exemption. Understand in-state, out-of-state, and triple-exempt municipal bonds.
- How Overnight Repo Works: Mechanics and Example Overnight repo is a short-term secured loan where one party sells securities to another and agrees to buy them back the next day, with interest.
- How Quantitative Easing Affects the Yield Curve How central bank asset purchases during quantitative easing compress the term premium, flatten the yield curve, and influence long-term interest rates across economies.
- How Rating Agencies Rate Structured Finance Tranches Explains how rating agencies assess CLO, ABS, and CMBS tranches using cash-flow waterfall and loss-coverage analysis, and why AAA structured notes differ from corporate AAA bonds.
- How Sovereign Debt Is Restructured Sovereign debt restructuring is when a country renegotiates terms with creditors. It uses haircuts, maturity extensions, and collective action clauses to restore solvency.
- How Subordination Levels Are Sized in Securitizations Learn how subordination levels are sized: rating agencies and originators use loss models, rating curves, and credit enhancement math to protect each tranche.
- How the Corporate Bond Secondary Market Works Corporate bonds trade over-the-counter after issuance, with wider bid-ask spreads than stocks. TRACE reporting provides price transparency that did not exist before 2002.
- How the Fed Funds Rate Affects Money Market Yields How the Fed funds rate transmission affects money market yields on funds and T-bills through overnight repo and federal funds markets.
- How the I Bond Composite Rate Is Calculated The Treasury formula combining fixed rate and inflation adjustment into the I Bond composite rate, updated semiannually.
- How the Yield Curve Affects Mortgage Rates The yield curve shapes mortgage rates because banks price mortgages using longer-term Treasury yields and pass through funding costs to borrowers.
- How TIPS Interest Payments Are Calculated How the inflation-adjusted principal affects coupon payments on Treasury Inflation-Protected Securities, with calculation examples.
- How to Calculate a Bond's Price: Step-by-Step Example A worked numerical example showing how to discount a bond's future cash flows to arrive at its fair market price using present-value math.
- How to Look Up a Municipal Bond by CUSIP Step-by-step guide to finding a muni bond's official statement, pricing, and rating using CUSIP lookup on EMMA and other public databases.
- How to Read a Corporate Bond Call Schedule Learn to interpret corporate bond call dates and prices—including make-whole and discrete call windows—to assess refinancing and price risk.
- How to Use Dollar Duration to Estimate Bond P&L Step-by-step method for converting modified duration into dollar profit-and-loss estimates for basis-point moves in bond yields.
- How Treasury Bill Discount Yield Is Calculated Learn the bank discount yield formula for Treasury bills: how the discount, maturity, and annual basis produce the quoted yield.
- How Treasury Bills Are Taxed at Federal and State Level Treasury bills are taxed as ordinary income at the federal level but exempt from state and local taxes; discount income is reported on Form 1099-B or Schedule D.
- How Treasury Bond Interest Is Taxed Treasury bond interest is fully taxable at the federal level but exempt from state and local income taxes, affecting after-tax yield calculations.
- How Yield Curve Flattening Hurts Bank Net Interest Margins Yield curve flattening narrows the spread banks earn between deposit rates and lending rates, squeezing profitability and reducing lending incentives.
- Humped Yield Curve An inverted or unconventional yield curve shape where intermediate-maturity bonds offer higher yields than both short and long-term bonds.
- I Bond Annual Purchase Limit Explained Series I bonds have an annual purchase limit of $10,000 per person, plus $5,000 from tax refunds. Special rules allow trusts and business owners higher caps.
- Implied Credit Rating from CDS Spreads Shows how to extract a market-implied credit rating from credit-default-swap pricing and when it diverges from official agency grades.
- In-State vs Out-of-State Municipal Bonds: Tax Differences Why in-state municipal bonds often save state and local tax, and when out-of-state munis still make economic sense.
- Incurrence Covenant A bond covenant limiting the issuer's financial leverage triggered when specific actions such as debt issuance or asset sales occur.
- Indexed Inflation Bond A bond whose principal is adjusted for inflation, protecting investors from erosion of real returns.
- Individual Corporate Bonds vs. Bond ETFs: Tax Treatment Differences How interest income, capital gains, and bond premium amortization differ in taxes when you hold individual bonds versus a bond ETF.
- Inflation Expectations and Bond Yields How investors' forecasts of future price increases shape the yields required on bonds, especially longer-dated instruments.
- Inflation-Protected Securities Bonds whose principal adjusts for inflation; TIPS and I-bonds offer protection against CPI erosion of purchasing power.
- Interest Coverage Test Trigger in CLOs and CDOs comparing interest collected to senior notes' interest obligations; breach redirects cash to deleverage.
- Interest-Only Strip A securitized mortgage strip that receives only interest cash flows and declines in value as prepayment risk accelerates.
- Interpolated Yield A synthetic benchmark yield for odd maturities, constructed by interpolating between two on-the-run Treasury yields.
- Inverted Yield Curve and Bank Profitability How inverted yield curves squeeze bank net interest margins and stress the financial sector through negative carry on deposits.
- Inverted Yield Curve Explained An inverted yield curve explained: when short-term bond yields exceed long-term yields, what causes it, and why it historically signals recession risk.
- Investment Grade Boundary BBB- threshold between institutional investor mandates and speculative-grade risk.
- Investment-Grade Bond An investment-grade bond is a debt security with a credit rating of BBB- or higher (from S&P/Fitch) or Baa3 or higher (from Moody's). These bonds have low default risk and are considered suitable for conservative portfolios.
- Investment-Grade vs High-Yield Corporate Bonds Comparison of investment-grade and high-yield bonds: risk, return, liquidity, and investor profiles.
- Issuance Schedule The government's published calendar of Treasury bond and bill auctions, defining when new debt securities are sold.
- Issuer Rating vs. Issue Rating Why a corporation's senior secured debt may carry a higher rating than its subordinated notes, reflecting collateral, priority, and recovery value.
- Jumbo Certificate of Deposit Large negotiable certificates of deposit, typically $100,000 or higher, traded in secondary markets as institutional money-market instruments with floating or fixed rates.
- Junk Bond A junk bond is a debt security rated below investment-grade with a significant risk of default. The term refers to bonds that offer very high yields in exchange for substantial credit risk.
- Key Rate Duration The sensitivity of a bond's price to a shift in yield at one specific maturity point on the yield curve.
- Key Rate Duration and Non-Parallel Yield Curve Shifts Key rate duration measures bond sensitivity to changes at specific maturities on the yield curve, enabling precise hedging when rates don't shift uniformly.
- Key Rate Duration: Measuring Yield Curve Risk by Maturity Key rate duration measures a portfolio's sensitivity to yield changes at specific curve points, isolating risk at each maturity rather than assuming parallel shifts.
- LIBOR-OIS Spread The difference between LIBOR (interbank lending rates) and OIS (overnight swap rates); a key gauge of banking-system stress and credit risk.
- Loss Severity The percentage of a loan's outstanding balance that is lost after a default, accounting for recovery from collateral sale, foreclosure costs, and legal expenses.
- Macaulay Duration Weighted-average time to recover principal from a bond, measured in years; foundational metric for interest rate sensitivity.
- Macaulay Duration: Calculation and Example Macaulay duration measures the weighted-average time to receive bond cash flows, expressed in years, with a step-by-step calculation example.
- Maintenance Covenant A bond covenant requiring the issuer to meet specified financial ratio tests on every reporting date, maintained throughout the bond's life.
- Make-Whole Call A bond call provision that compensates investors for early redemption by paying the present value of remaining coupons plus principal.
- Market Value CDO A collateralized debt obligation whose sufficiency relies on the market prices of assets, triggering forced selling or deleveraging if valuations fall below contractual thresholds.
- Master Note Facility Flexible short-term borrowing arrangement with variable coupons, often used by corporations to manage cash flow.
- Maturity Structure The distribution of a portfolio or market of bonds across different time horizons until redemption.
- Medium-Term Note A continuously offered debt security that allows corporations to raise capital flexibly through periodic tranches rather than a single large offering.
- Minimum Credit Rating Requirements for Investment-Grade Mandates Learn how institutional investment mandates define the lowest permissible credit rating, why BBB-/Baa3 matters for compliance, and what split-rated bonds mean.
- Minimum Purchase Amount for Treasury Securities The $100 minimum denomination for U.S. Treasury bills, notes, and bonds—how it applies at auction, in the secondary market, and through funds.
- Minimum Purchase Size for Corporate Bonds Understanding the standard $1,000 minimum denomination and odd-lot barriers that limit retail access to corporate bonds.
- Modified Duration Measure of a bond's sensitivity to interest rate changes, expressed as the percentage price change for a 1% yield shift.
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