Strip Bond

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.
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References in periodicals archive ?
A strip bond is where an investment firm buys a debt instrument and "strips" it into its separate parts.
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Proposals under debate include introducing a long-term ''strip bond'' -- a bond that can be divided into principal and its interest-bearing portion for sale separately -- and bonds whose principal and yield are allowed to float in proportion to the ups and downs in prices, they said.
Finance Ministry to float Japan's 1st 30-year bonds
The seals are composite with a Teflon strip bonded to the composite during fabrication, making the seal effectively a lifetime unit.
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Oien, "Steady motion of a rigid strip bonded to an elastic half space," Journal of Applied Mechanics, vol.
Xu, "Interaction functions of a rigid strip bonded to saturated elastic half-space," International Journal of Solids and Structures, vol.
Mixed boundary-value analysis of rocking vibrations of an elastic strip foundation on elastic soil with saturated substrata
We still don't recommend opening long positions on strip bonds due to high uncertainty concerning some key questions, including situation in Greece and the probability of monetary stimulation by the FRS.
UFS Investment Company - Daily review of the debt markets, May 22, 2012
In that position, he managed a group of bond traders with responsibility for strip bonds, agency zeros and long Treasury coupons.
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The Finance Ministry plans to issue strip bonds in fiscal 2001 to spur demand for Japanese government bonds (JGBs), ministry officials said Monday.
The ministry intends to submit a bill to enable the issuance of strip bonds to the regular Diet session convening Wednesday, they said.
Japan to float strip bonds in FY 2001
Strip bonds and interest rate snaps: some of the financial instruments sounded like erotic paraphernalia.
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In addition, the panel proposed that the ministry issue so-called strip bonds to diversify the range of debt issues it offers and to reinvigorate the bond market.
Gov't panel calls for greater use of yen in Asia

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