Puttable Bond PowerPoint PPT Presentations

2. Retractable bonds allow the investor to redeem the bond at par or allow the bond to remain outstanding until maturity. a. These bonds are called puttable bonds, why?

A puttable bond is a bond in which the investor has the right to sell the bond back to the issuer at specified times for a specified price. At each puttable date prior to the bond maturity, the investor may get the investment money back by selling the bond back to the issuer. The underlying bonds can be fixed rate bonds or floating rate bonds. A puttable bond can therefore be considered a vanilla underlying bond with an embedded Bermudan style option. Puttable bonds protect investors. Therefore, a puttable bond normally pays investors a lower coupon than a non-callable bond. This presentation gives an overview of puttable bond and valuation model. You can find more presentations at http://www.finpricing.com/productList.html.

A bond is a security that obligates the issuer to make ... Two cash flows to purchaser of bond: -B at time 0. F at time T. What is the price of a bond? ...

Bond Prices and Yields * * * * * * * Risk structure of interest rates Greater default risk, higher default premium Default premiums Yields compared to ratings Yield ...

LIQUIDITY AND LIQUIDITY RISK IN THE CORPORATE BOND MARKET Gady Jacoby, George Theocharides and Steven X. Zheng Seminar Presentation Seoul National University

Types of bonds by credit rating. Bonds come in many variations. Issuer. Government. Provincial ... Changes in credit rating (default risk). The Dynamics of Bond Prices ...

Fixed Income Securities Bond Prices and Yields: Figuring out the Assured Returns Rishit Shah What is a Bond? You've just loaned your neighbour $1,000 so that he can ...

They promise either a fixed-stream of income or a stream of income that is ... If dividends are not paid they cumulate. They have priority over common stock holders. ...

What is the price of a 10 bp increase in yield on a 10-year par bond with a ... What duration makes bond as volatile as stocks? ...

... not the option holder Convertibles Bond is convertible at ... basis Hedge the risk Convertible Hedge Requires an asset swap to maintain investment structure ...

... has the right to sell more bonds to holder in lieu of paying coupons in cash) ... Value of Option-Free Bond (VOF) E VOF E VOF ...

... market is a ... Jungle or Zoo Bears, Bulls, CATS, TIGRS, LYONS, COUGARS, COLTS, ... Exotic Paradise Euro Bonds, Gilt, Bund, Samurai Bonds, Sushi Bonds, Naked ...

If the Home Depot had more pricing power, it could consider using floating rate ... the coupons (interest payments) on the bond (loan) and the face value of ...

Credit Suisse. 600 mil DM. 5,05 % 2001. Nomura Securities. 30.000 bil. 5,20 % 1999 ... Bond = a security that is issued in connection with a specific ...

Title: No Slide Title Author: Zvi WIENER Last modified by: Zvi Wiener Created Date: 8/24/1997 8:53:09 PM Document presentation format: On-screen Show

Price quotes for T-Bills ... Price quotes for Notes and Bonds. Actual ... End of October 99 open interest for CBOT long-bond futures was 635,000 (each one ...

Interest Rate Risk Finance 129

Credit default swaps. Equity-linked swaps. 2. Asset swaps ... Many investors use Asset Swaps to 'arbitrage' the credit markets, as in many ...

Title: 1. Author: Last modified by: A Created Date: 11/19/2001 2:26:20 PM Document presentation format:

Innovations in Corporate Finance ... Issuer raises non-recourse financing, ... actors and studio executives.

Title: PowerPoint Presentation Author: Owner Last modified by: Owner Created Date: 1/1/1601 12:00:00 AM Document presentation format: On-screen Show (4:3)

Quotes By a Swap Market Maker (Table 7.3, page 155) 6.850. 6.87. 6.83. 10 years. 6.665 ... to the situation where 10 six-month loans are made to AA borrowers at LIBOR ...

Aswath Damodaran Getting to the Optimal: Timing and Financing Choices You can take it slow.. Or perhaps not

This leaves us with The intuitive analysis that preceded this section Industry average duration numbers, which can be used for any firm in that industy This measures ...

The Financing Decision - New York University

Aswath Damodaran Stern School of Business First Principles Invest in projects that yield a return greater than the minimum acceptable hurdle rate.

Aswath Damodaran Stern School of Business First Principles Invest in projects that yield a return greater than the minimum acceptable hurdle rate.

Global Equity Finance Daiwa Capital Markets Europe Limited Daiwa as a Counterparty Daiwa Capital Markets Europe Limited Who We Are Who We Are Daiwa Capital ...

By selling the floor, however, the borrower gives up gains from falling interest ... result, we would price swaptions using models for pricing options on bonds. ...

Title: Introduction to Financial Innovation Author: P.V. Viswanath Last modified by: P.V. Viswanath Created Date: 10/17/1999 3:59:29 PM Document presentation format

28 year old Nick Leeson $1,300,000,000 loss. bought by ING for $1.5. Zvi Wiener. VaR ... FASB FAS 133 www.fas133.com, FAS 107. IASC, IAS 39 www.iasc.org.uk ...

A company is a nexus of contracts, and management understands that the ... Strategic Positioning (Relative Bargaining strength a la Wal Mart). Whither Synergies ...

Title: No Slide Title Author: Zvi WIENER Last modified by: Zvi Wiener Created Date: 8/24/1997 8:53:09 PM Document presentation format: On-screen Show

0.40 0.67 1.00 1.56 0.16 $24,827.36. $2,234.46. 2.49 bb. 0.09 0.06 0.12 $70,542.11. 0.50 1.00 1.00 1.79 0.17 $31,034.20. $3,181.01. 1.75 b. 0.10 0.07 0.12 $69,560.07.

Corporate Finance: Lecture Note Packet 2 Capital Structure, Dividend Policy and Valuation Aswath Damodaran B40.2302.20 Stern School of Business

To Calculate D and Total Return For Items in the Banking Book, We Can Use the ... The formula tells us that the interest-volatility risk of holding the perpetuity ...

... mechanism for pooling capital in a low-cost way and/or minimizing related agency ... Reducing the risk by buying insurance against losses. ...

Using Market-Value Accounting for Changes in the PDV of the Banking Book to ... Marketable Securities. Real Estate and Equipment. With tangible short positions in ...

A bond that pays no coupons at all must be offered at a price that is much lower ... Income bonds: coupon payments are dependent on company income. ...

Different types of swaps, based on underlying currency, interest rate, or equity ... Conversion from a liability in one currency to a liability in another currency. ...

PASAR MODAL & MANAJEMEN PORTOFOLIO Mohamad Samsul Penerbit Erlangga BAGIAN 1 PASAR MODAL BAB 1 PASAR MODAL GLOBAL SISTEM EKONOMI PASAR Keberhasilan negara-negara ...

Automobile production. 13. 1990s Motor cars. 1980s Motor cycles. 1970s Cycles ... With trunk highways improving, competition from road transport to intensify. ...

Firm Value and Stock Prices. Is maximizing the value of the firm the same as maximizing the stock price? ... Stock Price maximization may increase risk of default. ...

Conversion from an investment in one currency to an investment in another currency ... Let the Swap be where USD is received and foreign currency is paid ...

... Company sells shares in public market for first time. Why Go Public? ... Debt may help solve. Debt instills discipline. Takes cash out of management hands ...

Watch credit risk. 17. Standards of Care. Prudent investor rule ... Credit (default risk issuer will be unable to redeem the investment at maturity) ...

Pr c demment: hypoth se qu'en pr sence de l'information ad quate, les analystes parviennent valuer les actifs. ...

Earnings drives stock prices. Form of ownership. Invest in stocks for. Dividends ... Experience the Citi Difference. 54. Important Information ...

Title: BEX Author: santiki Last modified by: set Created Date: 10/7/2004 7:39:30 AM Document presentation format: On-screen Show Company: SET Other titles

The written agreement between the corporate debt issuer and the lender. ... Direct placement is likely to have more restrictive covenants. ...

Tarheel Consultancy Services Manipal, Karnataka

Title: The Financing Decision Author: Aswath Damodaran Last modified by: Aswath Damodaran Created Date: 11/22/1997 7:34:36 PM Document presentation format

Title: PowerPoint Presentation Author: Bernhard r Bernhardsson Last modified by: slaug Bj rk Bj rnsd ttir Created Date: 8/13/2002 11:54:02 AM

The objective in designing debt is to make the cash flows on debt match up as ... By doing so, we reduce our risk of default, ... Soothe bondholder fears ...

... task; binomial models are preferred, but the Black model is sometimes used ... the result is obtained from the Black model, you must discount at the forward ...

In most businesses, keeping customers happy is the route to stock price maximization. ... Because the track record of firms on acquisitions is not very good.