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| '''Perpetual bond''', which is also known as a '''Perpetual''' or just a '''Perp''', is a bond with no [[maturity date]].<ref>[http://wps.pearsoned.co.uk/wps/media/objects/1669/1709773/0273685988_ch04.ppt#264,10,Different Types of Bonds: The Valuation of Long-Term Securities]</ref> Therefore, it may be treated as [[Equity (finance)|equity]], not as [[debt]]. Issuers pay [[Coupon (bond)|coupon]]s on Perpetual bonds forever, and they do not have to redeem the principal. Perpetual bond [[cash flows]] are, therefore, those of a [[perpetuity]].
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| Examples of perpetual bonds are [[consols]] issued by the UK Government. Most perpetual bonds issued nowadays are deeply subordinated bonds issued by banks. The bonds are counted as [[Tier 1 capital]], and help the banks fulfil their [[capital requirements]]. Most of these bonds are [[Callable bond|callable]], but the first call date is never less than five years from the date of issue—a call protection period.
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| ==Pricing==
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| Perpetual bonds are valued using the formula: <math>\frac{i}{y}</math> where <math>i</math> is Annual Coupon Interest on a bond and <math>y</math> is an expected yield for maximum term available. <ref>[http://faculty.business.utsa.edu/kfairchild/classes/5023/BONDVALU.doc BOND VALUATION]</ref>
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| ==References==
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| {{Reflist}}
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| ==External links==
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| *[http://www.livemint.com/2007/07/30171523/Perpetual-debt-in-favour-but.html "Perpetual debt in favour, but yields may fall"], [[LiveMint.com]], July 7, 2007
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| {{bond market}}
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| {{DEFAULTSORT:Perpetual Bond}}
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| [[Category:Bonds (finance)]]
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Latest revision as of 16:32, 15 December 2014
I would like to introduce myself to you, I am Andrew and my wife doesn't like it at all. To climb is some thing I really enjoy doing. Office supervising is my profession. Her family life in Alaska but her spouse desires them to transfer.
my web page are psychics real (http://srncomm.com/blog/2014/08/25/relieve-that-stress-find-a-new-hobby/)