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 5:05:29 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
Explain the major types of audit plans Three major types of audit plans Strategic -this the long term forward looking audit, it continually gets updated and identifies are

Q. Relative costs and benefits? Option 1- Factoring Reduction in receivables days = 15 days Reduction in receivables =15/365* £20m = £821916 Option 2 - The

Market mechanism: Market mechanism is a term from economics denoting to the use of money exchanged by sellers and buyers with an open and understood system of time and value t

Timing of Financial Reports: Just as the actual report requirements differ depending on the requirements of the stakeholder that will be using them, so too will the timing of t

What is the Scope of IFRS 8 IFRS 8 applies to organisations who: Equity or debt instruments are traded in a public market (stock market) Is in the process of obtai

Discuss how a business might limit agency problem between management and creditors

Derive and illustrate the monetary approach to exchange rate determination. Answer: The monetary approach is related with the Chicago School of Economics.  It is relies on two

Explain the vital role of government notes and bonds in the finance national debt. Government notes and bonds are issued within the USA by the US Treasury to finance national d

The price-yield relationship of a non-callable or a non-putable bond is convex because price and yield are inversely proportional. Figure 1 shows the price-yield

Methods of workers participation in management: the various methods of workers participation in management are as follows: 1. Informative participation: it refers to sharing of