Regardless of how the par value is distributed, at the ex coupon date a bond will sell for the remaining par value if and only if the contract rate equals the yield to maturity
An individual who purchased a stripped tax-exempt bond or coupon after October 22, 1986 but before June 11, 1987 (except as provided below) is treated as if he bought a tax-exempt obligation issued on the purchase date having an original issue discount equal to an amount that produces a yield to maturity
of the lower of: (a) the coupon rate of interest before separation, or (b) the yield to maturity
, on the basis of purchase price, of the obligation or coupon.
These are services that list large numbers of bonds and give quality rating, coupon rate, current yield, and yield to maturity
. These sources are also available on the Internet as follows: Moody's (www.Moodys.com); Standard & Poor's (www.standardandpoors.com); Fitch's (www.fitchratings.com).
Yield to call can be significantly lower than yield to maturity
, which is the return a bondholder can expect to receive if the bond is held until maturity.
This note explains a rigorous proof that shows how the difference between the price of a bond and its face value are directly linked to the difference between the bond's coupon rate and its yield to maturity
- Assume a corporation issues an applicable instrument at the beginning of the year with an issue price of $100 and a yield to maturity
of 20 percent in a month when the AFR is 9 percent.
The senior notes due 2026 have been priced at 99.893% of the principal amount with a yield to maturity
of 3.817%, the senior notes due 2049 have been priced at 99.949% of the principal amount with a yield to maturity
of 4.853% and the senior notes due 2024, have been priced at 102.368% of the principal amount plus interest deemed to have accrued since 15 January 2019, with a yield to maturity
Georgian Sovereign Eurobonds (GEORG) closed at 110.9 (+0.4% w/w) at 4.4% yield to maturity
Notes were offered to the public at 99.975 percent of the principal amount with a yield to maturity
of 4.503 percent.
The notes were sold at a price equal to 107.5% of the principal amount thereof, for a yield to maturity
The bonds are expected to carry a 4% coupon, payable semi-annually from June 16, 2011 and a yield to maturity
of between 5.5% and 6.5%.