International Banking Facility

Offshore Banking Unit (OBU)

What is an offshore banking unit (OBU)? An offshore banking unit (OBU) is a bank branch, located in another international financial center. For example, a bank based in London with a branch located in Delhi. Offshore banking units grant loans in the Eurocurrency market when they accept deposits from foreign banks and other OBUs. Euro-currency […]

Yield to Worst

Simple math terms for fixed coupon corporate bonds

Bonds, in general, are simply debt instruments that allow companies, or the government, to finance their capital needs by finding investors who are willing to lend them an amount in return for interest for a period, before repaying. the principal amount of the loan in full. . There are specific rates and periods on which […]

Yield to Worst

Definition of worst-case propagation

What is the worst propagation? Spread-to-worst (STW) measures the dispersion of returns between the best performing and the worst performing security in a given market, typically bond markets, or between the returns of different markets. Key points to remember Spread-to-worst (STW) measures the dispersion of returns between the best performing and the worst performing security […]

Yield to Worst

What does a negative bond yield mean?

When investors buy bonds, they are essentially lending money to bond issuers. In return, bond issuers agree to pay investors interest over the life of the bond and repay the face value at maturity. The money that investors earn from interest is called a return. Many times this return is positive, but there are certain […]

Yield to Worst

Definition of yield

What is a return? Return refers to the income generated and realized on an investment over a period of time. It is expressed as a percentage based on the amount invested, the current market value or the face value of the security. Yield includes interest earned or dividends received from holding a particular security. Depending […]