Meaning COMPANION BONDS: A class of a Collateralized Mortgage Obligation (CMO) whose principal is paid off first when the underlying mortgages are prepaid due to falling interest rates. When interest rates rise, there will be lower prepayments of the principal; companion bonds therefore absorb most of the prepayment risk of a CMO
More terms such as Companion bonds in Dictionary C.
- Definition Corporate Finance:
- Examples One of the three areas of the discipline of finance. It deals with the operation of the firm (both the investment decision and the financing decision) from the firm's point of view companion bonds definition.
- Definition Clearing Member:
- Examples clearing house. Each clearing member must also be a member of the exchange. Not all members of the exchange, however, are members of the clearing organization. All trades of a non-clearing member companion bonds explain.
- Definition Circus Swap:
- Examples A fixed-rate currency swap against floating U.S. dollar LIBOR payments companion bonds what is.
- Definition Common Stock:
- Examples represent equity ownership in a company. Common shares let an investor vote on such matters as the election of directors. They also give the holder a share in a company's profits via dividend companion bonds meaning.
- Definition CMO REIT:
- Examples of Real Estate Investment Trust investing in the residual cash flows of Collateralized Mortgage Obligation (CMOs). CMO cash_flows are derived from the difference between the rates paid by the companion bonds abbreviation.
