Price inside
From ACT Wiki
Price reflecting features and market conditions - securities - bonds - yield - yield curve.
"Price inside" means a difference between the yield on a new bond - or other security - at issue, and the yield on comparable bonds already trading in the secondary market.
When the new bond prices inside the existing secondary yield curve, its yield is lower.
This is a saving on the cost of borrowing for the issuer.
It is investment yield - or rate of return - given up by the investor.
- Excellent outcome for issuers
- "Sometimes, a bond may be issued with a higher price, and thus have a lower yield compared to outstanding debt.
- The bond will price inside its own yield curve.
- This is known as a new issue concession; when present in a green bond, we have termed it greenium.
- This is an excellent outcome for any issuer because it means that it pays less to fund its green bond compared to its vanilla debt."
- Green Bond Pricing in the Primary Market H1 2022 - Climate Bonds Initiative - p9.
See also
- Bond
- Climate Bonds Initiative (CBI)
- Control premium
- Conversion premium
- Equity risk premium
- Forward premium
- Greenium
- Issuer
- Liquidity premium
- Market price
- Market risk premium
- New issue concession
- Option premium
- Par value
- Premium
- Premium Listing
- Rate of return
- Return
- Risk premium
- Seasoned bond
- Secondary market
- Share premium
- Term premium
- Vanilla
- Yield
- Yield curve
