Corporate Bonds

Posts Tagged ‘investing’

Question: Need help with "bond lingo"?

I am looking into Corporate Bonds as an investment, but I cannot make heads nor tales of the Scottrade page with the bond information.

Answer: It is a Viacom bond. It matures in 2018. It sells at 96.5 per 100 or $965 per bond. The minimum quantity is 10 bonds which sort of surprises me. Normally it is 1 bond. So to buy the minimum you will have to pay $9650. They are rated BBB-. Lower than investment grade. They have 229 bonds available. The coupon rate is 4.625% so you will be paid 46.25 per bond per year. It is paid twice a year. It does not say when the payment dates are. Now when you buy bonds you also have to pay for the accrued interest that has not yet been paid. Now you need to be aware that bond ratings are somewhat suspect these days. They tend to be inflated as many folks found out who bought mortgage bonds. They might be inflated a lot.

Reviewing the M&G Corporate Bond fund

Question: Computing Cost Basis For Non-Certificate Shares.?

Over many years we have had stock in a corporate bond income fund traded on the NYSE. The certificate shares are easy because you know what you paid for them. But every month, our dividends have purchased new shares of non-certificate shares. Now that we are selling it all off, how do we compute the cost basis of these non-certificate shares? If more than one way, which is best? We assume IRS wants the right numbers. We have all the records needed.

Answer: basis of non-cert shares = total of dividend proceeds used to buy them. it is possible that a certain amount of dividend paid each month was NOT used to buy more shares; do not include these small amounts as part of your share basis. example: your dividend is 54.43, the per share price is 53.37; you got one share and 1.06 cash.

Corporate Bond Sales Decline