The purchase of ordinary bonds (usually, U.S. Treasury bonds) that are then repackaged such that the receipts to interest and corpus payments are sold separately. The effect is to transform a security paying regular interest into zero-coupon receipts of varying maturities. Sold under a variety of names such as CATS®, LIONS, and TIGRSM, these investments have proved popular for tax-sheltered accounts such as IRAs. Generic names for them include animals and felines. Also called stripping.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.