Draw bond
Draw bond is a bond , the repayment of which takes place by drawing certain tranches on certain dates .
General
Most of the bonds will be at their maturity repaid. The drawing is a form of redemption of bonds that must be provided for in the bond terms . For this purpose, certain issue numbers of the bond are drawn, which are repaid in full.
Procedure
The bond terms and conditions provide for certain drawing dates on which the drawn lot numbers or tranches are repaid in full. The repayment is made through the paying agents , who also reimburse the bond interest.
Financial math
Draw bonds are characterized by the fact that the stock market price of the drawn items rises to the redemption price (100%) on the draw date. If the draw and repayment dates do not match, the prices are always at the yield level one year before the next repayment , while the price jump takes place at the time of the next draw. During the creditors a repayment loan with security can expect will be repaid on the due date, the creditor a draw bond can expect his pieces on average in the mid- maturity will be drawn. This results in a higher volatility than with standard bonds .
Demarcation
Draw bonds are not to be confused with lottery bonds , in which instead of or in addition to interest on the bond, a prize is paid from a lottery .
Individual evidence
- ↑ Ute Arentzen / Eggert Winter, Gabler Wirtschafts-Lexikon , 1997, p. 339
- ↑ Melchior Palyi / Paul Quittner (eds.), Handwortbuch des Bankingwesens , 1933, p. 484
- ↑ Erich Kosiol, Finanzmathematik , 1948, p. 87
- ↑ Melchior Palyi / Paul Quittner (eds.), Handwortbuch des Bankingwesens , 1933, p. 484