Bond yield Current Affairs, GK & News

Bond yield is the effective rate of return that a bond earns. A bond is an instrument for borrowing money. Bonds are issued by companies and governments to raise funds. The bond’s rate of return changes with the price of the bond i.e. is not fixed. Eg: if the face value of a 10 year bond is 100 INR and it’s coupon payment is 5 INR, then the bonds are brought by the investor at a face value of 100 INR. The issuer will pay the investor 5 INR every year (coupon payment). At the end of 10 years, the issuer will pay 100 INR to the investor. In this case, the bond yield is 5%. Recently, bond yields have been rising in both domestic and global markets.

What are AT1 bonds?

Department of Financial Services (DFS), under finance ministry, has sent a memorandum to the chairman of Securities and Exchange Board of India (Sebi) and has asked it to withdraw a rule treating AT1 bonds (perpetuals) which is having 100-year maturity. Highlights The circular was issued by SEBI on March 10, 2021 regarding the AT1 bonds ..