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Pure Yield Pickup Swap

A bond swap that involves swapping a relatively high-price bond with a relatively low-price bond (otherwise, the two bonds are...

Joint Bond

A bond that is payable to several creditors, unconnected in interest or by judgment. In other words, such a bond...

Junk Bond

A bond that is rated below investment grade (a rating of BB or lower) due to its bad credit quality....

Dirty Price of Bond

The full price of a bond. It is calculated by adding accrued interest and any commissions or fees to the...

Investment Value of a Convertible

The value of a convertible bond (CB) without its conversion feature, i.e., only as a straight bond. The investment value...

Interest-Indexed Bond

An index linked bond (historically issued in Australia in the 1980s) that pays a fixed real coupon, with the fixed...

Mini-Coupon Bond

A bond whose coupon is lower than the market rate of interest (prevailing yield) at the time of issue. This...

Manufactured Interest

Any coupon or interest that the borrower, in securities lending arrangements, receives and is contractually bound to pass on to...

Bond Substitution Swap

A bond swap that entails swapping substitute bond issues experiencing short-term imbalances in yield spreads. The imbalance will correct itself...

Basis Point

A basis point (bps) is 0.01 percentage point and equals $1,000 annually on a contract protecting $10 million of debt...