Possibilities of using stepped coupon bonds
and restructuring factoring as instruments of net circulating capital management
Investments in zero coupon bonds
, if made on a large scale, could pose systemic risks since the credit risk on such bonds could go unrecognized until the maturity of the bonds, the central bank said.
What is a zero coupon bond
? How is the owner taxed?
In addition, when interest rates rise, zeroes will experience greater price depreciation than coupon bonds
. The lower market value will have to be recorded in compliance with the Governmental Accounting Standards Board (GASB) recently released Statement No.
This was accomplished by orthogonalizing the market and industry variables to the rates of return on the time weighted index of zero coupon bonds
. Our surplus duration measures were then obtained by regressing total rates of return on each insurer's common stock against the composite return on zero coupon bonds
, as well as the stock market return residuals (obtained by regressing the stock market returns against the zero coupon composite returns) and the insurance industry residuals (obtained by regressing the industry returns against the zero coupon composite returns and the stock market residual returns).
Section I of the paper contains a review of previous literature; Section II develops the information-cost and option-risk-reduction hypotheses; Section III describes the sample of regular coupon bonds
and complex securities; Section IV describes the empirical tests and results; and Section V contains summary comments and conclusions.
Zero coupon bonds
offer a fixed rate of return like other bonds, but do not pay interest until maturity.
Translation: Two bond traders are congratulating themselves on the smart purchase of some zero coupon bonds
. When interest rates fell one-half of one percent point, these two made a nice profit."
These bonds, which are issued at a large discount from par, include zero coupon bonds
and bonds with coupon rates set well below market yields at the time of issuance.
FINCA Armenia, a subsidiary of FINCA Impact Finance, has announced the issuance of AMD 1.4 billion (USD 2.8 million) in nominal, non-documentary coupon bonds
, further diversifying its funding base, the company said.
Starting February 15, 2013, nominal coupon bonds
issued by ARTSAKH HEK ojsc were listed and included in the Bbond list