YTM: Yield to Maturity and Bond Pricing

Sometimes talking about present values, par and yield to maturity will catch even a well versed practitioner off guard, but to see a pricing model in action helps and that is precisely what this video does – in this clip an assumed future rate is discounted into present values and we arrive at the bond price. Well worth watching (twice!).

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We need to clear our bonds, ensure there are retail offerings.

Ireland has been downgraded by Standard and Poors, we are on a ratings watch with Fitch and Moody’s as well. The last bond issued by the NTMA was not subscribed as widely by the international financial community as they were previously and the Irish stepped up and bought up 55% of the bond, we saved the day ourselves. Now we are at a crossroads, we need to raise money, it will be more expensive given our national outlook and at the same time investors are shying away from our sovereign debt, equally we can’t cut back spending enough to bridge the gap and impressing the international investor market with taxation will hurt our national economy.

There is enough money in this country to clear all of the bonds required, and it is held in ready cash format. …

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