Versions Compared

Key

  • This line was added.
  • This line was removed.
  • Formatting was changed.

...

Capital Interest Bond (CIB). CIBs have a fixed real coupon rate and a nominal principal value that rise with inflation. Periodic coupon bonds are calculated by multiplying a real coupon rate by the inflation-adjusted principal. The inflation-adjusted principal is repaid at the maturity of the bond. Current governments that issue ILBs using this method are the USA, Canada, Australia, France, Italy, and New Zealand.

Index Annuity Zero Coupon Bonds (IAZCB). These securities are zero coupon bonds that pay an inflation-adjusted principal at the time of redemption. In short, any ILB that is considered a Capital Interest Bond or an Index Annuity Bond, which has been stripped to a principal only strip, can be considered an IAZCB.

...