Discussion

John from CA posted over 3 years ago:

This is simplistic at best. Example, I have a bond bought as AAA insured by MBIA. Bond does not have underlying rating established. MBIA was downgraded to BBB so bonds are downgraed to BBB even though they are ESCROWED to maturity and should be AAA. Bond ratings can drop several grades at once reflecting the raters inability to track financial condition changes. The investor has a better feel for his bond by reading published financials from the municipality; but, these are often late or not released. More regulation is needed to monitor bond sales and reporting requirements.


Donald from CA posted over 3 years ago:

She should have covered Tier 1 bonds

Tier 1 bonds are lower-rated bank bonds. That means, if the issuer defaults, all of the bank’s other creditors must be repaid before the bond investors recoup their money. Tier 1 bonds have unlimited maturity. The issuer pays interest on the bond only when the bank also pays a dividend.


Norman from WA posted over 2 years ago:

This is a very good presentation of Bonds.


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