Understanding Debt Puts and Debt Zeroes
Staff Writers
Put Bonds
Put bonds are so-called because they allow doctor-investors and other bondholders to give bonds (put) back to the issuer at par on specified dates prior to maturity. Put bonds have either a fixed or variable interest rate and may have single or multiple tender dates.
Furthermore, they can be either mandatory (in which case the physician-investor has a specified period of time to keep the bonds at the new rate); or optional (in which case the physician-investor has a specified time period to tender the bonds).
Zero Coupon Bonds
These bonds are offered at a deep discount to par face value, and there are no coupon interest payments. Instead, the interest is reinvested and compounded semi-annually and paid to the physician-investor at maturity.
Conclusion
Have you ever purchased put or zero coupon bonds and what were your reasoning, strategy and results?
Related Information Sources:
Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759
Financial Planning: http://www.jbpub.com/catalog/0763745790
Risk Management: http://www.jbpub.com/catalog/9780763733421
Healthcare Organizations: www.HealthcareFinancials.com
Health Administration Terms: www.HealthDictionarySeries.com
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Filed under: Investing, Portfolio Management
