what does refinance mean for bonds
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- Refinancing may refer to the replacement of an existing debt obligation with another debt obligation under different terms.
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- Most people refinance when they have equity on their home, which is the difference between the amount owed to the mortgage company and the worth of the home. Tips for Consumers Refinancing their Homes – Some things to think about before deciding to refinance.
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What is a 'Bond' What is a 'Bond'. A bond is a debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate.
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- Most people refinance when they have equity on their home, which is the difference between the amount owed to the mortgage company and the worth of the home. 1  Tips for Consumers Refinancing their Homes – Some things to think about before deciding to refinance.
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Home Refinance Costs - How to Run the Numbers Understanding Home Refinancing Costs. Refinancing a home loan involves paying off the original mortgage and taking on a new one. So you are basically trading your original home loan for a new loan. Homeowners often pursue this in order to obtain a lower interest rate or more favorable terms. But refinancing your home mortgage is not always a good idea.
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- Getting a new mortgage to replace the original is called refinancing. Refinancing is done to allow a borrower to obtain a different, and even better interest term and rate. The first loan is paid off, allowing the second loan to be created, instead of simply making a new mortgage and throwing out the original mortgage.ur home refinance calculator shows how much you can save locking in lower rates. Second, many people refinance in order to obtain money for large purchases such as cars or to reduce credit card debt. The way they do this is by refinancing for the purpose of taking equity out of the home.
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What Do Bond Ratings Mean? Bond ratings gauge a bond issuer’s financial ability to repay its promised principal and interest payments. Ratings are based on an analysis of the issuer’s financial condition and creditworthiness. In essence, the higher the rating, the more likely it is that a bondholder will receive his or her principal again when the bond matures. Credit rating agencies assess the risks of certain bonds, issuing grades that reflect the issuer’s ability to meet the promised principal and interest payments.
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Glossary of Municipal Securities Terms This is sometimes referred to as a “legal defeasance.” Defeasance usually occurs in connection with the refunding of an outstanding issue after provision has been made for future payment of all obligations related to the outstanding bonds, sometimes from funds provided by the issuance of a new series of bonds.
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Bond (finance) In finance, a bond is an instrument of indebtedness of the bond issuer to the holders. It is a debt security, under which the issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay them interest (the coupon) and/or to repay the principal at a later date, termed the maturity date. War bond is a bond issued by a country to fund a war. 2  Serial bond is a bond that matures in instalments over a period of time. 3  In effect, a $100,000, 5-year serial bond would mature in a $20,000 annuity over a 5-year interval.
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- As homeowners pay down mortgage principal early, refinance their mortgages, or default on their loans, the payments to bondholders fluctuate. The name given to these bonds that investors buy is mortgage-backed securities, or MBS for short.
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Open Mobile Alliance Open Mobile Alliance. The Open Mobile Alliance (OMA) is a standards body which develops open standards for the mobile phone industry.
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Types of Bonds Corporate and Treasury bonds are issued with stated maturities. The purchase of a bond from an issuer is essentially a loan to the issuer in the amount of the principal, or face amount, of the bond for a prescribed period of time in return for a specified annual rate of interest. The bondholder receives interest, generally in semiannual payments, until the bond is redeemed. When the bond matures or is called by the issuer, the issuer returns the “face value” of the bond to the investor in a single principal payment. With a CMO, the ultimate borrower is the homeowner who takes on a mortgage loan.
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- Discount Bond A bond that is issued for less than its par (or face) value, ... Fixed-Rate Bond A bond that pays the same amount of interest for its entire duration. ... Back Up A slang term for the movement in spread, price or yield of a ... Bond Discount The amount by which the market price of a bond is lower than ...
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CERTIFICATE bond-a certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal. bond certificate.
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What Is a Repo (Repurchase Agreement)? - TheStreet Definition The transaction is structured as a sale of the bond, with an agreement to repurchase it the next day at a higher price that factors in the dealer's interest expense. A dealer may also finance a customer's ownership of a bond by lending money and accepting the bond as collateral. This is a reverse repo and is structured as a purchase of the bond with an agreement to resell it to the customer the next day at a lower price that factors in the customer's interest expense.
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One-Year Treasury Constant Maturity What it means: An index published by the Federal Reserve Board based on the average yield of a range of Treasury securities, all adjusted to the equivalent of a one-year maturity. Yields on Treasury securities at constant maturity are determined by the U.S. Treasury from the daily yield curve. That is based on the closing market-bid yields on actively traded Treasury securities in the over-the-counter market. How it's used: It's an index that is used to set the cost of variable-rate loans, particularly adjustable-rate mortgages (ARMs). Lenders use such an index, which varies, to adjust interest rates as economic conditions change.
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Bond Funds placed on deposit in a Bond usually cannot be withdrawn prior to maturity or they can perhaps only be withdrawn with advanced notice and/or by having a penalty assessed. Bonds are also debt instruments where the issuer agrees to pay a certain rate of interest until the principal is returned on its maturity date.lso, while the term Bond is in common usage for such certificates of deposit in the United Kingdom, they are also known as term deposits in countries like Australia, Canada and New Zealand, as time deposits in the United States, and as fixed deposits in India and some other countries.
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What is an 'Indenture' DEFINITION of 'Indenture'. A legal and binding contract between a bond issuer and the bondholders. The indenture specifies all the important features of a bond, such as its maturity date, timing of interest payments, method of interest calculation, callable/convertible features if applicable and so on.The indenture also contains all the terms and conditions applicable to the bond issue. legal and binding contract between a bond issuer and the bondholders. The indenture specifies all the important features of a bond, such as its maturity date, timing of interest payments, method of interest calculation, callable/convertible features if applicable and so on.
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refinance refinance. 1  to finance again. 2  to satisfy (a debt) by making another loan on new terms: She just refinanced her mortgage. 3  to increase or change the financing of, as by selling stock or obtaining additional credit.
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- Advanced Bond Concepts: Duration. The term duration has a special meaning in the context of bonds. It is a measurement of how long, in years, it takes for the price of a bond to be repaid by its internal cash flows. It is an important measure for investors to consider, as bonds with higher durations carry more risk and have higher price volatility than bonds with lower durations.
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bond Bond. 1  Bonds are debt and are issued for a period of more than one year. The US government, local governments, water districts, companies and many other types of institutions sell bonds. 2  A security representing the debt of the company or government issuing it. When a company or government issues a bond, it borrows money from the bondholders; it then uses the money to invest in its operations. In exchange, the bondholder receives the principal amount back on a maturity date stated in the indenture, which is the agreement governing a bond's terms.
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What is 'Term To Maturity' Term to maturity refers to the remaining life of a debt instrument. With bonds, term to maturity is the time between when the bond is issued and when it matures, known as its maturity date, at which time the issuer must redeem the bond by paying the principal or face value. Between the issue date and maturity date, the bond issuer will make coupon payments to the bond holder. BREAKING DOWN 'Term To Maturity' Bonds can be grouped into three broad categories depending on their terms to maturity: short term bonds of 1 to 5 years, intermediate term bonds of 5 to 12 years, and long term bonds of 12 to 30 years.
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Maturity Maturity. The time when the issuer of a bond or other debt security must repay the principal or when a borrower must repay a loan in full. For example, if a company issues $1 million in bonds with a maturity of 10 years, the company must repay $1 million to bondholders 10 years after the issue. The amount owed at maturity is usually the same as the debt or loan's face value.
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- A callable bond provides the issuer (borrowing entity) with an option to redeem the bond before its original maturity date. The ability to call a bond gives the issuer a way to respond to falling interest rates, a circumstance that allows the issuer to refinance this debt at a lower rate of interest.
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What Does Refinance Your Car Mean? When you buy a car and borrow money to pay for it, you are financing the purchase of the car. Later down the road, you may realize that you have a poor interest rate or that your payment is too high. One way to reduce your interest and payments is to try to refinance the loan.efinancing is the process by which you can get a new lender to loan you enough money to pay off the old loan. The old lender releases the lien on the title, and the new lender takes a security interest on the property.
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- Bonds A bond is any interest-bearing or discounted government or corporate security that obligates the issuer to pay the bondholder a specified sum of money, usually at specific intervals, and to repay the principle amount of the loan at maturity.