Mass Gas Articles

Tom Hoenig, president of the Kansas City Fed, on Thursday warned against keeping rates too low for too long. Read more: Fed warned on interest rates

See the article here:
Fed warned on interest rates

Fed officials have expressed concerns that near-zero interest rates could fuel ‘excessive risk-taking in financial markets’ but believe the possibility of such an outcome is ‘relatively low’ Read more from the original source: Fed sees risks in low rates policy

View post:
Fed sees risks in low rates policy

Sinking funds, which are the most frequent method of principal amortization required in the indentures of publicly traded corporate bonds, mandate the retirement of a specified number of bonds either via purchase from investors at a mutually agreeable price or via full payment of principal by the issuer. Sinking funds allow issuers to choose the cheapest of these two methods of bond retirement. As a result, if interest rates have risen and the price of the bonds has fallen, the issuer can generally find a bondholder willing to sell at a price less than par value. On the other hand, if interest rates have fallen and the price of the bonds has risen, the issuer will optimally retire the number of bonds specified in the sinking fund at par value. If the issuer chooses to purchase the bonds for the sinking fund at par value, the bondholders who receive payment in full for their bonds ate determined by the indenture trustee through a lottery that allows the winning bond serial numbers the full principal payment (naturally, winning this lottery when interest rates have fallen implies that the winning bondholders lose, as they must reinvest their money at lower interest rates) Original post: Find Helpful Info about Retirement

Follow this link:
Find Helpful Info about Retirement