4
votes
Accepted
Can companies deliberately cause their bonds to be downgraded to junk status in order to reduce repayment?
Your yield calculations are oversimplified, but that's not the point of your question. The question is - could a company buy back it's debt for a discount and screw over bondholders.
It would be ...
- 142k
3
votes
Dividend amounts -- not just yield -- from my bond fund decreased over the past 18 months
After all, the bonds still exist like when I bought the fund.
Some of them do (or most of them, or none of them, depending on how long ago you bought the fund). Each individual bond has a maturity ...
- 9,553
3
votes
Accepted
Bonds near maturity better than 3-month CDs? Need help explaining Bond stats
The YTM is an annual rate, but note your effective rate would be better than the 0.53% you calculated because you actually have 107 days from the quote date until maturity instead of 3 months. You can ...
- 47.3k
2
votes
Accepted
Which spot Treasury bond is used to calculate this high-yield spread?
See Nick R's answer for the explanation of the concepts.
If you want to find out whether it's the 2 year, 3 year or 10 year spot on the treasury curve that is being used as the risk-free yield, you ...
- 2,197
2
votes
Which spot Treasury bond is used to calculate this high-yield spread?
The spot yield curve is not a chart of a single treasury bond yield - e.g., 2year of 10 year. The spot yield curve is a graph of zero-coupon bond yields plotted against time. For example, to obtain ...
- 6,440
2
votes
Impact of rising interest rates on default risk of existing junk bonds?
When interest rates rise, existing bonds are not affected from the perspective of a bond issuer (assuming fixed interest bonds). However, when the bond matures the issuer will be forced to repay the ...
- 7,462
1
vote
Dividend amounts -- not just yield -- from my bond fund decreased over the past 18 months
There are different moving parts in this.
When interest rates drop, bond prices rise. That's a good thing for the fund owner.
But as existing bonds in the portfolio mature, new purchases offer ...
- 77k
1
vote
Accepted
How's buying corporate junk bonds buying equities by proxy?
High-yield debt tends to move in-line with the stock market but can still have smaller moves than the stock market.
Or in a re-organization the stockholders are often wiped-out with the bondholders ...
- 3,592
Only top scored, non community-wiki answers of a minimum length are eligible