Variable-rate demand note

(redirected from Variable Rate Demand Obligation)

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.
References in periodicals archive ?
According to FINRA, Citigroup failed to submit interest rate reset information for 251,507 weekly-reset variable rate demand obligation (VRDO) securities to the Municipal Securities Rulemaking Board's (MSRB) Short-Term Obligation Rate Transparency (SHORT) System within the prescribed time requirements.
Auction rate securities are an alternative to variable rate demand obligation bonds.
Securities and Exchange Commission, assigned a 'AA' bank bond rating to approximately $152 million of University of Colorado Health (UCHealth) series 2018B and series 2018C variable rate demand obligation (VRDO) bonds issued by the University of Colorado Hospital Authority (UCHA).
Chicago: Fitch Ratings has assigned a 'AA' bank bond rating to approximately $152 million of University of Colorado Health (UCHealth) series 2018B and series 2018C variable rate demand obligation (VRDO) bonds issued by the University of Colorado Hospital Authority (UCHA).
Baltimore also filed a potential class action on March 25 claiming banks fixed interest rates of variable rate demand obligations.
The 'F1+' short-term rating is supported by the long-term credit quality of the system and adequacy of the city's highly liquid resources available to fund any un-remarketed puts on the roughly $88 million in outstanding variable rate demand obligations. Based on Fitch's rating criteria related to self-liquidity, the system's position of eligible cash and investments available for same-day settlement exceeds the maximum tender exposure on any given date by the required 1.25x.
Scottsdale Healthcare is converting its series 2006C, D, and E variable rate demand obligations to a fixed rate.
Baltimore filed a potential class action lawsuit in New York Monday against a group of banks the city says conspired to fix interest rates of variable rate demand obligations, or VRDOs.
The 2018A bonds, which are variable rate demand obligations (VRDOs), are scheduled to sell via negotiation on or about Sept.
Roughly 60% of variable rate debt consists of variable rate demand obligations (VRDO) supported by letters of credit (LOC) from Barclays and PNC Bank (the PNC LOC expires in March 2019 and the Barclays LOCs expire in August 2020).
It has assigned a 'AA' long-term rating to the University of Colorado Hospital Authority's (UCHA) $198 million of series 2018A, B and C variable rate demand obligations (VRDO) to be issued on behalf of UCHealth and upgraded existing revenue bond ratings to 'AA' from 'AA-' on UCHealth bonds issued by UCHA and the Colorado Health Facilities Authority.
SOURCE OF REPAYMENT: The 'F1+' Short-Term rating also reflects management's policies to ensure for a timely delivery of the cash amounts necessary to purchase variable rate demand obligations if necessary.

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