Coupon stripping is a financial process in which the coupons are detached from a bearer security and sold separately, transforming the original bond into a zero-coupon bond. This method creates multiple securities from a single original bond, serving as a unique mechanism for generating cash flow.
A comprehensive exploration of stripped bonds, zero coupon bonds created by separating principal and coupon payments of ordinary bonds, including their history, types, key events, mathematical models, and more.
Zero-coupon bonds are a type of bond that does not pay periodic interest. Instead, they are issued at a discount to their face value and mature at par. Learn more about their types, applications, and historical background.
A Certificate of Accrual on Treasury Securities (CATS) is a type of zero-coupon U.S. Treasury security that does not pay periodic interest but is sold at a discount and matures at face value.
Comprehensive entry on Certificate of Accrual on Treasury Securities (CATS), detailing their features, benefits, historical context, and applications in retirement and education planning.
A detailed exploration of Deferred Interest Bonds, their features, types, implications, and practical applications.
This entry covers the concept of the reinvestment rate - the rate of return from reinvesting the interest earned from bonds or other investments. It details how reinvestment rates differ between zero coupon funds and regular interest-paying bonds.
STRIPS Bonds, also known as Separate Trading of Registered Interest and Principal of Securities, are pre-stripped zero coupon bonds that are direct obligations of the U.S. Treasury. This entry provides an in-depth look at STRIPS Bonds, their characteristics, and applications.
