A senior note is a debt instrument that has a higher priority than other types of debt in the event of liquidation. This means that senior noteholders will be paid before other creditors if the issuer of the debt is unable to make payments. Senior notes typically have a lower interest rate than other types … Read more
Cross default occurs when a debtor defaults on one obligation, and as a result, is in default on all obligations. This can happen when the terms of different obligations stipulate that a default on one obligation constitutes a default on all obligations. Cross default can also occur when a debtor is unable to make a … Read more
Junk bonds are bonds that are considered to be of high risk, and as a result, they offer higher yields than other types of bonds. Junk bonds are typically issued by companies that are in financial trouble, or that are considered to be high-risk. Junk bonds are rated by credit rating agencies, such as Standard … Read more
Corporate bonds are debt securities that are issued by corporations and sold to investors. How do corporate bonds pay out? When a company issues a corporate bond, it is essentially taking out a loan from investors. In return for lending the company money, investors receive periodic interest payments (known as coupons) as well as the … Read more
A Negative Covenant Definition is a covenant that limits or prohibits certain activities that the issuer of the covenant considers to be detrimental to the value of its investment. For example, a Negative Covenant Definition may prohibit the issuer from entering into certain types of transactions, such as asset sales, or from incurring debt above … Read more
A call date is the date on which a call option expires. A call option is a contract that gives the holder the right, but not the obligation, to buy a security at a specified price within a certain period of time. The call date is the last day that the holder can exercise the … Read more
A Yankee bond is a bond that is issued in the United States by a non-U.S. issuer and is denominated in U.S. dollars. The term “Yankee” is typically used to refer to bonds that are issued by companies based in Europe, although the term can also be used to refer to bonds issued by companies … Read more
A pass-through security is a type of debt instrument that allows investors to receive payments based on the cash flow of the underlying asset. The payments are made to the investors on a regular basis, and the amount of each payment is determined by the interest rate and principal amount of the underlying asset. Pass-through … Read more
AA+ vs. Aa1: What’s the Difference in Yield? How much cheaper are bereavement flights? Bereavement flights are typically much cheaper than regular flights, since airlines offer special rates for those who are flying for funeral or memorial purposes. The exact amount that you’ll save depends on the airline and the route, but it’s not uncommon … Read more
. Yield to Maturity (YTM): What It Is, Why It Matters, Formula. Is a high yield to maturity good? A high yield to maturity is generally considered to be good, as it indicates that the bond will pay out a higher rate of interest than most other bonds. This can be advantageous for investors who … Read more
