T Bonds - Treasury Bond Trading

American Investment Training provides free information on all investment securities inckuding T Bonds. Treasury Bonds can be a great investment for people looking to put money away especially when short term interest rates are low.

Treasury Bonds are long term Government securities. Their maturities are over 10 years out to 30 years and are often used in block trading. They are backed by the US Government, thus they carry no credit risk. Their yields reflect interest rates and supply and demand.

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Treasury Bonds

Yield To Call YTC

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Bond Yield To Call

If a bond is callable, it is very important to be aware of the yield to call. If the investment is called early at a lower price than what you paid, your YTC will be lower. If the call price is higher, then yield is higher.
Usually it is best for call dates to be as far out as possible for an investor. Normally a called bond is an unwanted occurance for an investor. Bonds are usually called when interest rates decline, so an investor will be forced to invest the proceeds elsewhere at lower rates.

Callable bonds are priced to the call date or the maturity date. Bond brokers will price the bond to the call when it's a premium, and price to the yield to maturity when it is a discount bond.

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What is a subordinated Debenture

A bond that issues where the interest is higher than the company's other bonds, but the issue has a lower priority if the company goes out of business is called a subordinated debenture.

The interest paid to this debt is guaranteed, but if the company liquidates, these debts are the lowest creditor priority. Investors would have to wait for other obligations, including secured and debenture holders to be paid.