## Thursday, 4 October 2012

### A look at the bond table

Let's take a look at the bond table, and see how to break it down.

Column 1: Issuer. This is the company, state, province or country that is issuing the bond

Column 2: Coupon. The coupon refers to the fixed interest rate that the issuer pays to the lender. The coupon rate varies by bond.

Column 3: Maturity Date. This is the date when the borrower will pay the principal back to the lenders (investors). Typically, only the last two digits of the year are quoted, so 25 means 2025, 04 is 2004, etc.

Column 4: Bid Price. This is the price that someone is willing to pay for the bond. It is quoted in relation to 100, regardless of the par value. Think of the bond price as a percentage, a bond with a bid of \$93 means it is trading at 93% of its par value.

Column 5: Yield. The yield indicates the annual return until the bond matures. Yield is calculated by the amount of interest paid on a bond divided by the price -- it is a measure of the income generated by a bond. If the bond is callable it will have a "c" followed by the year in which the bond can be called. For example, c10 means the bond can be called as early as 2010.