Post by unlawflcombatnt on Mar 12, 2007 12:32:26 GMT -6
Below is a U.S. Treasury Bond Primer taken from an excerpt from Yahoo Finance explaining how U.S. treasury bonds work.
"How U.S. Treasury Bonds Work
For the ultimate safety with your bond investments, you can turn to the U.S. government, the most reliable borrower in the world. The U.S. government has never defaulted on a loan, and it would take a mighty big catastrophe before the U.S. Treasury could collapse....
Since U.S. government bonds are among the safest in world, they almost always have lower yields than other bonds of the same maturity. That's the price you pay for quality....
Treasury securities cannot be redeemed before maturity and do not have call provisions. Some Treasury bonds issued before 1985 did have call provisions, however, so you need to watch out if you buy these bonds in the secondary market. As soon as the bonds are called, interest payments cease.
You can buy Treasuries through a broker, or you can buy them directly from the federal government, which holds regular auctions that individual investors can participate in. However, if you buy directly from the government, you can't redeem the security prior to maturity" (If you want to sell them before maturity, you have to sell them through a broker in the secondary market. The government will NOT buy them back before maturity.)...
"Treasury Bonds, Bills and Notes
The United States government issues several different kinds of bonds through the Bureau of the Public Debt" (a branch of the Treasury Dept.)...
"Treasury debt securities are classified according to their maturities:
*Treasury Bills have maturities of one year or less.
*Treasury Notes have maturities of two to ten years.
*Treasury Bonds have maturities greater than ten years.
Treasury Bonds, Bills, and Notes are all issued in face values of $1,000, though there are different purchase minimums for each type of security.
Investors often shorten the word Treasury to just the letter "T" when referring to these bonds. Thus, Treasury Bonds are known as T-Bonds, Treasury Notes are called T-Notes, and Treasury Bills are T-Bills.
Treasury Bills are issued in three maturities. Bills with 91-day and 182-day maturities are auctioned by the Treasury each Monday. 364-day Bills are auctioned every four weeks on Thursday, 13 times a year. The interest rate of T-Bills is determined at each auction, depending on what bidders are willing to pay. T-Bills do not make interest payments, however. Instead, they are purchased at a discount to face value. They are the only Treasury securities that sell at a discount.
U.S. Treasury Notes are issued in two-, three-, five-, and ten-year maturities. The two year and five year Notes are auctioned each month, while the three year Notes are issued quarterly, and ten year Notes are auctioned six times a year. All Notes pay interest twice a year, and expire at par value.
Treasury Bonds are usually issued in thirty-year maturities, and pay interest twice a year...."
The entire Yahoo Finance article can be found at: "How U.S. Treasury Bonds Work"
"How U.S. Treasury Bonds Work
For the ultimate safety with your bond investments, you can turn to the U.S. government, the most reliable borrower in the world. The U.S. government has never defaulted on a loan, and it would take a mighty big catastrophe before the U.S. Treasury could collapse....
Since U.S. government bonds are among the safest in world, they almost always have lower yields than other bonds of the same maturity. That's the price you pay for quality....
Treasury securities cannot be redeemed before maturity and do not have call provisions. Some Treasury bonds issued before 1985 did have call provisions, however, so you need to watch out if you buy these bonds in the secondary market. As soon as the bonds are called, interest payments cease.
You can buy Treasuries through a broker, or you can buy them directly from the federal government, which holds regular auctions that individual investors can participate in. However, if you buy directly from the government, you can't redeem the security prior to maturity" (If you want to sell them before maturity, you have to sell them through a broker in the secondary market. The government will NOT buy them back before maturity.)...
"Treasury Bonds, Bills and Notes
The United States government issues several different kinds of bonds through the Bureau of the Public Debt" (a branch of the Treasury Dept.)...
"Treasury debt securities are classified according to their maturities:
*Treasury Bills have maturities of one year or less.
*Treasury Notes have maturities of two to ten years.
*Treasury Bonds have maturities greater than ten years.
Treasury Bonds, Bills, and Notes are all issued in face values of $1,000, though there are different purchase minimums for each type of security.
Investors often shorten the word Treasury to just the letter "T" when referring to these bonds. Thus, Treasury Bonds are known as T-Bonds, Treasury Notes are called T-Notes, and Treasury Bills are T-Bills.
Treasury Bills are issued in three maturities. Bills with 91-day and 182-day maturities are auctioned by the Treasury each Monday. 364-day Bills are auctioned every four weeks on Thursday, 13 times a year. The interest rate of T-Bills is determined at each auction, depending on what bidders are willing to pay. T-Bills do not make interest payments, however. Instead, they are purchased at a discount to face value. They are the only Treasury securities that sell at a discount.
U.S. Treasury Notes are issued in two-, three-, five-, and ten-year maturities. The two year and five year Notes are auctioned each month, while the three year Notes are issued quarterly, and ten year Notes are auctioned six times a year. All Notes pay interest twice a year, and expire at par value.
Treasury Bonds are usually issued in thirty-year maturities, and pay interest twice a year...."
The entire Yahoo Finance article can be found at: "How U.S. Treasury Bonds Work"