CATS

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CATS

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Certificate of Accrual on Treasury Securities

A formerly-issued Treasury security whose coupons had been stripped by an intermediary. CATS therefore paid no interest. They were sold at a significant discount from par and matured at par. CATS fluctuated in price, sometimes dramatically, because changes in interest rates made them more or less desirable. CATS could be invested IRAs and other pension accounts; they were also exempt from state and local taxes. They were issued between 1982 and 1986, becoming obsolete when the U.S. Treasury began issuing its own stripped bonds. See also: Zero-Coupon Bonds.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Certificate of Accrual on Treasury Securities (CATS).

CATS are US Treasury zero-coupon bonds that are sold at deep discount to par, or face value. Like other zeros, the interest isn't actually paid during the bond's term but accumulates so that you receive face value at maturity.

You can use CATS in your long-term portfolio to provide money for college tuition or retirement. For example, you may purchase them in a tax-deferred IRA or a tax-free Roth IRA or Coverdell education savings account (ESA).

As with other zeros, CATS prices can be volatile, so you risk losing some of your principal if you sell before maturity. And like other federal government issues, the interest is free of state and local income tax but subject to federal income tax.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in classic literature ?
Soon the Cat's mouth began to water once more after her licking business.
He's my cat -- and you've just got to make the best of it."
`That depends a good deal on where you want to get to,' said the Cat.
You will remember, isn't it, the cat belonging to the American woman in the hotel at Paris, of which you have spoken to me?
"No one can regret more than I the fact that you made me," asserted the cat, crouching upon the floor and slowly swaying its spun-glass tail from side to side.
Struck in mid-air, a trifle of a flying machine, all its delicate gears tangled and disrupted, Cocky fell to the floor in a shower of white feathers, which, like snowflakes, eddied slowly down after, and after the plummet-like descent of the cat, so that some of them came to rest on her back, startling her tense nerves with their gentle impact and making her crouch closer while she shot a swift glance around and overhead for any danger that might threaten.
At the opening notes of the melody--a slow, wailing, dirgelike air--the cats rose, and circled round their mistress, marching to the tune.
There was a plaintive little mew--a long quiver--and Paddy's friendly soul had fared forth to wherever it is that good cats go.
"Look at me," said the Cat. "For the same foolish reason, I have lost the sight of both eyes."
He was by when I rescued Nancy's cat, and did not quite approve of the deed.
The great cat lay crouched upon a thick limb, hidden from the ape's view by dense foliage, waiting patiently until the anthropoid should come within range of his spring.
The sun got round behind the wood, and it was quite late in the afternoon; but still the cat sat upon the basket.