imported>Doug Williamson |
imported>Doug Williamson |
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| ''Price reflecting benefits and market conditions - securities - bonds - yield.'' | | 1. ''Banking - credit risk''. |
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| New issue premium is the positive difference in yield between a new bond and a comparable seasoned bond already trading in the secondary market.
| | A bank which is considered to be very highly creditworthy, so that it presents a very low credit risk. |
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| It is the extra yield enjoyed by investors, and paid by issuers.
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| Yield and bond market price being inversely related, new issue premium is reflected in lower market price for the new bond at its issue.
| | 2. ''Reference rates''. |
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| | | A highly creditworthy bank that is the basis for calculating a reference interest rate. |
| :<span style="color:#4B0082">'''''New issue premium - new issue concession - greenium'''''</span>
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| :"The new issue premium is the extra yield that a buyer receives, and a seller pays for a new bond, compared to where seasoned bonds from the same issuer are trading in the secondary market at the time of issuance.
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| :A new issue premium is a standard feature of the bond market.
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| :Sometimes, a bond may be issued with a higher price, and thus have a lower yield compared to outstanding debt.
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| :The bond will price inside its own yield curve.
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| :This is known as a new issue concession; when present in a green bond, we have termed it greenium.
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| :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."
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| :''Green Bond Pricing in the Primary Market H1 2022 - Climate Bonds Initiative - p9.''
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| == See also == | | == See also == |
| * [[Bond]] | | * [[Bank]] |
| * [[Climate Bonds Initiative]] (CBI) | | * [[Credit risk]] |
| * [[Control premium]]
| | * [[Creditworthy]] |
| * [[Conversion premium]]
| | * [[EURIBOR]] |
| * [[Equity risk premium]]
| | * [[Reference bank]] |
| * [[Forward premium]]
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| * [[Greenium]]
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| * [[Issuer]]
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| * [[Liquidity premium]]
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| * [[Market price]]
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| * [[Market risk premium]]
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| * [[New issue concession]]
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| * [[Option premium]]
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| * [[Par value]]
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| * [[Premium]]
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| * [[Premium Listing]]
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| * [[Price inside]]
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| * [[Return]]
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| * [[Risk premium]]
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| * [[Seasoned bond]]
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| * [[Secondary market]]
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| * [[Share premium]]
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| * [[Term premium]]
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| * [[Vanilla]] | |
| * [[Yield]] | |
| * [[Yield curve]] | |
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| | [[Category:Accounting,_tax_and_regulation]] |
| [[Category:The_business_context]] | | [[Category:The_business_context]] |
| [[Category:Corporate_finance]]
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| [[Category:Investment]] | | [[Category:Investment]] |
| [[Category:Long_term_funding]] | | [[Category:Long_term_funding]] |
| [[Category:Ethics]]
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| [[Category:Identify_and_assess_risks]] | | [[Category:Identify_and_assess_risks]] |
| [[Category:Manage_risks]] | | [[Category:Manage_risks]] |
