Stripped bond

Stripped bond

Bond that can be subdivided into a series of zero-coupon bonds.

Strip Bond

A bond, especially a U.S. Treasury security, that is traded separately from its coupons such that it pays no interest. Strip bonds are sold at a significant discount from par and mature at par. They fluctuate in price, sometimes dramatically, because changes in interest rates make them more or less desirable. They can be placed in IRAs and other pension accounts; however, unlike other Treasury securities, they are subject to federal taxes. Generally speaking, strip securities are quoted according to their yields rather than their prices. In 1985, the U.S. Treasury began issuing its own strip bonds, called STRIPS, which replaced other vehicles, such as CATS and TIGRS, that had been issued by the Treasury and stripped by another party.
References in periodicals archive ?
in its stripped bond and related programs, and to launch the company's new gold-backed Monetas on the international market.
Georgian plans to use the net proceeds received from this offering ($1,243,049 after deducting the Agent's fees), principally to augment the capital employed by its subsidiary, Georgian Trust Company Limited, in its stripped bond and related programs, to launch its new gold backed Monetas on the international market, and to explore new services and products.
1286 treats the holder of a stripped bond (or coupon) as if the holder purchased a newly issued debt instrument with OID.
The company plans to use the net proceeds received at this closing ($950,350 after deducting the Agent's fees), principally to augment the capital employed by its subsidiary, Georgian Trust Company Limited, in its stripped bond and related programs, to launch its new gold backed Monetas on the international market, and to explore new services and products.
91-49 provided a simplified method of reporting gain for loan sales when the annual stated rate of interest payable on the stripped bond is no more than 100 basis points lower than the annual stated rate of interest payable on the original loan.
91-46 indicated that amounts received under a mortgage-servicing contract were interest payments for stripped bonds if (1) the amounts exceeded reasonable compensation for services and (2) the mortgages were sold at the time the mortgage-servicing contract was entered into.
Some types of discounted debt instruments include corporate bonds, municipal bonds, certificates of deposit, stripped bonds, and collateralized debt obligations.
If it fails the coupon requirement, it must meet certain "specified portion" requirements that generally relate to stripped bonds.