Treasury Lock

(redirected from Treasury Locks)

Treasury Lock

A derivative whereby one guarantees oneself a particular yield on a Treasury security. That is, one purchases a Treasury lock for a certain price; if the actual price of the designated Treasury security is higher than the price of the lock, the buyer must pay the difference. On the other hand, if price is lower than the price of the lock, the buyer receives the difference. One buys a Treasury lock when a certain yield is important to his/her investment strategy but there is uncertainty on the future direction of Treasury yields. Treasury locks are settled in cash.
References in periodicals archive ?
Best has observed that some insurers have begun to prepare for the impact of a rising interest rate environment by using hedging techniques such as Treasury locks or by reducing the average duration of their bond portfolios.
In addition to the current interest rates that are attractive compared to historical levels, we were able to lower our effective interest rates from the coupon rates quoted above, by hedging about 75% of our interest rate exposure through a series of Treasury Locks executed over the last 30 days," said Jerry Benkert, Vectren's Executive Vice President and CFO.
As a result of the payment of the redemption premium and the settlement of the Treasury locks, the Company expects to recognize an aggregate loss on extinguishment of debt during the fourth quarter of 2010 of approximately $78.
The Company continues to exclude the gain on settlement of treasury locks for the restated 1999 FFO.
Swaps associated with underwriting securities may also be exempt: While legislative language is murky, it may be that fixed to floating swaps associated with the issuance of debt or Treasury locks or forward starting swaps associated with a future issuance may be exempt or may simply be suggesting that a "when issued" security not be classified as a derivative.
A) - The loss on unused treasury locks resulted from the termination
The company has entered into $875 million of treasury locks to hedge against interest rate increases.
31, 1998 its negative marked-to-market on its portfolio of forward Treasury locks is $6.
shareholders, loss on treasury locks, loss on relocation of
Additionally, the company has no forward equity contracts, treasury locks or similar derivative instruments that could result in a loss to the company.
The trust also announced that it has entered into interest rate hedging agreements known as Treasury locks with Merrill Lynch and Chemical Bank, which have the effect of fixing the base rate for the trust to issue debt within the next nine months with a principal amount of $100 million and a term to maturity of seven years.
Full browser ?