Variable-rate demand note

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Variable-rate demand note

A note that is payable on demand and bears interest tied to a money market rate.

Variable-Rate Demand Note

A debt security that a holder may require the issuer to redeem before maturity. When this occurs, the issuer must pay par to the holder, and the holder loses any future coupon payments that he/she might otherwise have been due. An advantage to a variable-rate demand note from the holder's standpoint is the fact that the holder may reinvest the par value in a new bond in a time of rising interest rates. This protects the holder from certain types of interest rate risk.

Variable-rate demand notes come in two main forms. The first allows the holder to demand redemption on any of several days throughout the life of the bond, while the second only allows this on one particular day. Variable rate demand notes are also known as variable rate demand obligations, option tender bonds, or put bonds. In Canada, the most common term is a retractable bond.
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This would seem to put bonds in a bearish position, if it weren't for Iran.
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Proceeds of the series AH bonds will be used to remarket UC's outstanding 2011 series AA-2 put bonds.
Throughout his career, Jim has been a leader in innovating high grade products for issuing and investing clients, including structures such as synthetic put bonds, continuously offered retail notes and index-like corporate bonds," Kabatznick said.
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145 million first tier revenue refunding put bonds, series 2012-B.
B) Bondholder has the right to put bonds at the end of 7.
Additionally, concerns remain surrounding the near-term escalating debt service profile and refinancing of existing put bonds with the potential for higher interest costs.