Glossary of Fixed Income Market Terminology
Investor Research & Communications
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The final price or yield cost to issuers after paying underwriting fees to the dealer.
Mortgage collateral that is superior to sub-prime pools, but inferior to prime pools;
often as result of lack of documentation and perhaps a small credit-related blemish.
Alt-A is often considered a gray area due to the lack of a definitive difference between
these loans and prime or A-minus loans apart from the difference in documentation.
As a rough guide (but by no means hard and fast), a prime loan might have a FICO
score in the 700s; an A-minus loan’s FICO score might be in the 620-700 range, while
sub-prime scores would be below A-minus.
An option type where the option buyer can exercise the option on any date on or after
the first exercise date.
Announcement Date The date that a company announces the size and maturity of their upcoming debt
ARM (Adjustable Rate
A mortgage with a coupon rate that adjusts periodically on the basis of variations in a
designated reference index; most ARMs have periodic and lifetime caps and floors.
An option is at-the-money if the strike price equals the market price of the underlying
The yield, spread or price of a security is said to back up when it gets more expensive
or costly from the issuer’s perspective. In other words, if the security’s yield becomes
higher or its price lower, the security might be said to have backed up in price.
Basis Point /
Bps / ”Beep”
One one-hundredth of one percent; used to describe the amount of change in yield in
An option type where the option buyer can exercise the option on one or more pre-
specified dates after and including the first exercise date, typically quarterly, semi-
annually, or annually; the specific call dates frequently coincide with the coupon
List or inv