2.6.8. Bond Notation
Corporate bond listings typically show the coupon (interest) rate, maturity date, and last price. The listing table in the media also shows the current yield (“Cur Yld”) and the volume traded (“Vol”), such as the following listing:
|
Corporate Bond Listing Example |
||||
|
Bonds |
Cur Yld |
Vol |
Close |
Net Chg |
|
ABC 6s 24 |
5.7 |
20 |
105 3/8 |
+1/4 |
|
XYZ 6 5/8 30 |
6.7 |
10 |
99 1/8 |
-1/8 |
The companies issuing the bonds are listed in the first column, in this case ABC and XYZ. This is followed by the interest rate paid on the bond and an “s” if the payments are made semiannually. For example, ABC’s bonds pay “6s,” which means 6%, in two semiannual payments. The two-digit number following the interest rate indicates the year the bond matures: ABC in 2024 and XYZ in 2030. The ABC bonds have a current yield of 5.7% based on their closing price of 105 3/8% of par (or $1,053.75), and the XYZ bonds have a current yield of 6.7%, based on their closing price of 99 1/8% of par (or $991.25). For ABC, the volume traded the day before (indicated by the number 20) was $20,000, and the price rose 1/4 of a bond point, or $2.50. For XYZ, the volume traded the day before (indicated by the number 10) was $10,000, and the price fell by 1/8 of a bond point, or $1.25.
If a question on the exam says “an investor sells 5M of bon