Glossary

Balloon Maturity

A repayment schedule for an issued bond where a large number of the bonds mature at the same time. When balloon maturity occurs, a company must pay the principal back to borrowers on many bonds at once.

Basis Points (BPS)

A basis point is one hundredth of a percentage point (0.01%). For e.g. 75bps = 0.75%

Bond Convert

Bond issuer converts the issued convertible bonds to Shares.

Bond Exchange

An exchange offer that allows the bond holders to exchange their existing bonds for another class of debt or equity securities.

Broken Amount

It is the amount which is calculated as a short coupon for the first interest payment after the issue date. E.g., the bond is issued on 21/01/2003 maturing at 30/06/2008 with 6.5% interest rate paying on 01/July each year. Then the first interest payment date would fall on 30/06/2003. The interest is calculated for the first 161 days i.e. the days between first interest accrual day and first interest payment day is called as Broken Amount.

Bunny Bond

A type of bond that offers investors the option to reinvest coupon payments into additional bonds with the same coupon and maturity.