TOBs are synthetically created short-term tax exempt instruments. A TOB sponsor will buy a portfolio of fixed rate, long term municipal bonds with ratings between AA-AAA and combine them with an interest rate swap to create short term tax exempt floating rate bonds.
The tax-exempt status creates a high level of demand particularly from investors who seek tax exempt cash flow as a source of annual income and revenue. The buyers of TOBs are for the most part money market mutual funds. Money market mutual funds are guided by certain regulations as to what type of bonds they can have in their portfolio. Specifically, the underlying municipal bonds must be rated at least AA-. The maximum maturity of the municipal bonds is thirteen months and the average weighted maturity of a money market fund’s tax exempt bond portfolio must be no longer than 50 days. This compares to typical maturities of municipal bonds of five to fifteen years. The money fund maturity guidelines combined with a strong demand for tax exempt instruments creates a very active and deep market for these synthetically created short-term tax-exempt securities. The approximate size of the TOB market is $70Bn.
With respect to the underlying quality of the municipal bond, TOB sponsors (including Merrill Lynch) generally mandate that the TOB program can not carry any bonds in inventory related to the TOB program with ratings below AA- because the protection of principal is important to the investors.
Tender Option Features
In order to truly simulate the characteristics of a short-term tax-exempt security, the TOB sponsor has to provide a way for investors to liquidate their investment at par value. This is accomplished by giving the investor the right to tender (or put) the security to the remarketing agent at par value plus accrued interest at regular intervals. These intervals are based on investor demand (Merrill’s program generally sets them at one week).
On put days, the investor has the choice to either tender the TOB or to roll them over at a reset tax-exempt rate. The investors are required to give the TOB sponsor one week notification prior to a put in the case of weekly TOBs and same day notification (prior to 10:00am) for daily TOBs. The risk that the TOBs might be put by the investors and might not be immediately remarketed by the remarketing agent is the reason why the liquid...
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...s the risk of BNPP having to hold the TOBs through a process of credit deterioration on the underlying bonds below A+.
The active secondary market for high-grade municipal bonds act as a mitigant to short term/ market session price volatility. Average daily trading volume in the municipal market is $10Bn. According to Merrill Lynch, the average typical bid offer spread is 1/4bps on 70% of the trades, ½bps on 20% of the trades and up to 4bps on the remaining. According to Bear Stearns and Lehman Brothers the typical bid/offer spread is 1/2bps on 75% of the trades. These tight spreads in the municipal market (particularly the high-grade market) act to mitigate against wide swings in the market which could lead to market losses on a municipal bond portfolio. Therefore, under a liquidation scenario, we feel confident that the collateral can be sold in a short time frame and with little risk of market price deterioration.
Given the high quality of the collateral, the tight bid ask spread in the municipal market and the acceleration triggers provided for in the documentation, we feel that a 10% risk equivalent accurately reflects the risk involved in the transaction.
4. A question as to the effect of the payments, at the treasury, of the bonds of Hardenberg and of the four bonds of Birch, Murray & Co.
Stein, J. (1992). Convertible Bonds As Backdoor Equity Financing. Retrieved on June 12, 2006, from the World Wide Web at: http://www.financeprofessor.com/summaries/Stein1992ConvBond%20paper.htm.
However, financial situation of the firm plays a very important role in the decision of the bondholder and this company has been one of the most profitable companies America in terms of ROE, ROA ad gross profit margin. Apart from decrease in earnings and cash flow in 1997, UST had continuous increases in sales (10-year compound annual growth rate of 9%), earnings (11%) and cash flow (12%). They are generating their cash flows out of the operations. Thanks to their premium pricing, they are achieving more than average gross profit margin. So, over the years UST's revenues are stable and positive, and generally its statements are positive. The company does not have any problems with its cash flow.
Everyone has their own unique story when it comes to immigration. Anaisa Truffin now 26 years has her very own unique experience of the immigration life. Through many great answers that she gave me I’m going to explain the struggles of having to abandon her youth to flourish in a new society.
Rousmaniere, Peter. “Facing a tough situation.” Risk & Insurance 17.7 (June 2006): 24-25. Expanded Academic ASAP. Web. 23 March 2011.
This paper is written to provide a reasonably comprehensive overview of Section 1031 of the IRC as it pertains to real estate transactions, and to offer some thoughts on the wealth-creation advantages that 1031 Exchanges offer.
There are many styles of parent involvement and parenting styles. Parental involvement includes attending school functions, helping with homework, or simply showing interest in what is occurring in school. Parental involvement is also both social aspects and intellectually stimulating activities beyond schoolwork. Parental involvement has different components including: parent-child relationship, aspirations and expectations a parent has for their child, and parental involvement within the school. (Hoang)
Much research has also been done on the impact that parental involvement has on an adolescent’s development and education. One study done viewed parental involvement as a multidimensional concept that includes school-based involvement, home-based involvement, and academic socialization. (Wang & Sheikh-Khalil, 2014). The researchers defined school-based involvement as communication between the parents and teacher, attending school events, and volunteering at the adolescent’s school. Home-based involvement was defined as setting up a structured time for homework and leisure, and monitoring the child’s progress. Academic socialization was defined as the parents communicating to their child their expectations and encouraging their children to form their own educational and career goals. (Wang & Sheikh-Khalil,
only make up 16.7% of the capital structure. Thus, the credit risk for any credit commitment was not too high
People spend an extensive part of their lives at work, so it is not astonishing that they expect to be rewarded and fulfilled with the job that they do. Motivation is concerned with why people do things as well as what drives them to act in a particular way. Understanding what motivates an individual is important in a workplace. Motivated employees are happier at work. They get more satisfaction from their work, they are absent less frequently, and work with more enthusiasm. This encourages them to contribute more, hence increasing the productivity in the organization. Unmotivated workers will not be as contented with their position in the work environment as motivated workers. The job might not be as important for them which may lead to a poor performance, which will lead to less efficiency and hence to poor productivity.
William Sharpe, Gordon J. Alexander, Jeffrey W Bailey. Investments. Prentice Hall; 6 edition, October 20, 1998
“Parent involvement," a term researchers use to describe the interest family takes in a child 's education, is of special interest to educators who encourage parents to help kids at home with homework and projects. School districts also focus on methods to encourage parents to view the school as an important part of family life as children grow. Theories on parent involvement explore the links between family and school interaction and attempt to identify the reasons for high and low parent participation (Ryan, 2015).
Parental involvement as defined by Greene and Tichenor (2003) is participation “in the educational process by enhancing their parenting skills, developing positive communication skills between home and school, volunteering, providing learning opportunities at home, contribute to decisions that affect schooling, and collaborating with the community in support of the school” (p. 242).
Parent involvement affects all aspects of a child’s education. Parents must be involved as teachers, learners, supporters, and advocates of their child’s learning (Hopkings). Studies show that kids who know that their parents are involved and interested tend to take more responsibility for their own learning and behavior. Schoolwork and grades improve. Work habits improve. Less work is handed in late. Fewer referrals for behavior problems are made. Attendance increases, and fewer kids show up late for class (Hopkings). With all this information documented it shows the true importance of parent involvement in education. The more involved the parents are, the better off each child will be. So when you become a parent, get involved in your child’s education!
The topic of family involvement with children’s education has caught my attention since I have seen a lack of it throughout my own education. Parent involvement is generally low or not enough in certain urban districts. Many parents seem unaware of the importance of their participation and the large role they play on their children’s education. It is many concepts and factors that can potentially affect students’ academic performance. It is socio economic, family factors that can negatively affect a student’s learning engagement and participation in educational achievement. The question then is: How can Public schools promote family involvement?