Step-up (step down) notes, Financial Management

These types of securities have more than one coupon rate and each subsequent coupon rate is higher (or lower) than the previous coupon rate. For example, a 10 year step-up note (or step down note) might have a coupon rate that is 10% for the first five years and 11% (or 9%) for the last five years or, the step-up note (or step down note) could call for a 10% coupon rate for the first three years, 10.5% (or 9.5%) for the fourth and fifth year and 11% (or 9%) for the remaining five years. When there is only one change (or step up or step down) like the first example, then it is known as a single step-up note (or step down note). When there is more than one change then it is known as a multiple step-up note (or step down note) like the second example.  

Posted Date: 9/8/2012 5:05:20 AM | Location : United States







Related Discussions:- Step-up (step down) notes, Assignment Help, Ask Question on Step-up (step down) notes, Get Answer, Expert's Help, Step-up (step down) notes Discussions

Write discussion on Step-up (step down) notes
Your posts are moderated
Related Questions
Principal repayment before the scheduled date is called a prepayment. Every individual borrower normally has the option to pay off all or part of their loan

Which type of financing is appropriate to each firm?

Write down what processes and data you would analyse when looking at the following scenarios and write down any improvements you could include to ensure that the problem would be l

Preferred Stock This is a category of capital stock that will gives its holders preference  over common stockholders in the distribution  of earnings  or rights to the assets o

what type of financing is appropriate to each fim

Q. Explain about Inventory Turnover Ratio ? Inventory Turnover Ratio: - Definite items of inventory are slow moving. It signifies that their consumption is quite slow and capit

how would you judge the potential

Q. Describe about Self-Employment Tax? Self-Employment Tax - Most individuals who are in business for themselves, like PARTNERS, SOLE PROPRIETORS or independent contractor ar

Role of Custodians The Securities and Exchange Board of India on 5th May, 1996, through its notification No.S.O.344 (E) has issued the SEBI (Custodian of Securities) Regulation

A company borrows $1,500,000 at LIBOR plus a lending margin of 1.25 percent per year on a six-month rollover basis from a London bank.  If six-month LIBOR is 4 ½ % over the first s