Corporate Bond trading

Purchase XYZ Corporate 7.0s of 2008 at a bid side price of 120bps over 5-yr U.S. Treasury yield of 6.5% does this mean, the bond will be paying 120bps over Treasury Yield? what does the “7.0s” mean?

coupon ?

coupon 7.0 price is 7.7, so it is trading at discount? just a guess

And it means *NOW* the price corresponds to a 7.7% yield(which happens to be 120 bps above similar maturity treasury). It’s not promising a 120 bps over Treasury for the life of the bond.

So you would buy at a yield of 7.7%, which would be the bid yield. 7’s is bond trader talk for the coupon. Like saying Let me pick up the BCE 6.5’s of OC-12… BCE 6.5% of October 2012.

Spreads are a common way of quoting Bonds on the BID and OFFER: 260 x 250, means 260 BP BID by 250 BP OFFER over the benchmark bond (Treasuries usually).

fsa-sucker Wrote: ------------------------------------------------------- > And it means *NOW* the price corresponds to a 7.7% > yield(which happens to be 120 bps above similar > maturity treasury). It’s not promising a 120 bps > over Treasury for the life of the bond. this makes sense, but the next payment due on this bond should still be the coupon amount… the 7.7% yield is just for pricing purpose…am I right?