Interest Only (IO) Strips

外汇网2021-06-19 14:09:14 43

The interest portion of mortgage, Treasury or bond payments, which is separated and sold inpidually from the principal portion of those same payments. The periodic payments of several bonds can be "stripped" to form synthetic zero-coupon bonds.

Also, an IO strip might be part of a larger collateralized mortgage obligation (CMO), asset-backed security (ABS) or collateralized debt obligation (CDO) structure.

|||Financial engineers, such as 华尔街 dealers, frequently strip and restructure bond payments in an effort to earn arbitrage profits. Zero-coupon Treasury strips are an important building block in many financial calculations and bond valuations. For example, the zero coupon or spot-rate Treasury yield curve is used in option-adjusted spad (OAS) calculations and for other valuations of bonds with embedded options.

Interest Only (IO) Strips

推荐文章

热门文章

推荐文章

热门文章