stripping

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Related to Stripped Coupon: Zero-Coupon Securities

Stripping

The act or practice of removing the coupons from a bond, especially a U.S. Treasury security, and trading the bond separately such that it pays no interest. Stripped 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 invested in IRAs and other pension accounts; however, unlike other Treasury securities, they are subject to federal taxes. Generally speaking, stripped securities are quoted according to their yields, rather than their prices. In 1985, the U.S. Treasury began issuing its own stripped securities, called STRIPS, which replaced other vehicles, such as CATS and TIGRS, that had been issued by the Treasury and stripped by another party.

stripping

References in periodicals archive ?
[section]1.1275-7; (6) any receivable generated through an extension of credit under a revolving credit agreement (such as a credit card account; (7) a stripped bond or stripped coupon (as defined in IRC Sections 1286(e)(2) and 1286(e)(3)), if the debt instrument from which the stripped bond or stripped coupon is created is described in (1)--(6), above; and (8) a certificate of trust representing a beneficial ownership interest in a debt instrument described in items (1)-(7), above.
Under the proposed accounting method for originated mortgage-servicing rights, R would no longer recognize a gain equal to the value of servicing rights that represent reasonable compensation and are not stripped coupons under Sec.
[section] 1.1275-7; (6) any receivable generated through an extension of credit under a revolving credit agreement (such as a credit card account; (7) a stripped bond or stripped coupon (as defined in IRC Sections 1286(e)(2) and 1286(e)(3)), if the debt instrument from which the stripped bond or stripped coupon is created is described in (1)--(6), above; and (8) a certificate of trust representing a beneficial ownership interest in a debt instrument described in items (1)--(7), above.