Product Description
In July 2007, eight Norwegian municipalities invested in complex financial instruments sold by Citigroup through Terra Securities. All eight municipalities were hydro electric power producers and a considerable amount of their tax income was based on concession fees from electricity. To stabilize the volatile income from the energy market, the municipalities sold the future electricity production and invested the present value in the international financial markets. Narvik Kommune, one of the eight municipalities, invested in a Tender Option Bond (TOB) using a Collateralized Debt Obligation (CDO) as collateral. Only four months after the initial investment, Citigroup liquidated the investment creating a realized loss of 90%. The analysis of the TOB and the CDO structure shows that the reason for the sudden drop in the investment value was related to the loss of correlation between taxable and tax-free interest rates causing the hedges to break. In addition, the mark-to-market valuation guidelines created by the Financial Accounting Standards Board (FASB) did not offer clear guidance for how to valuate illiquid securities such as the TOB and the CDO. ... Read more

Product Description
Completely updated to reflect the latest changes in the debt-instrument market. Provides the most current information available on the different bond instruments, trends in fixed income markets generally, and trends in individual markets. Softcover. ... Read more

Customer Reviews (6)

Vital information to help the investor understand the bond market.
A vitally informative book that helps even the inexperienced investor understand the bond market.This updated edition reflects the latest information on the Federal Reserve System, portfolio management, and economic risk factors; along with comprehensive overview on available debt instruments.You will find this book a beneficial introduction to the world of bond instruments that elude even the most sophisticated investor.The author, RobertZipf consults, writes and lectures on bonds and public finance

Very broad coverage (may be not too deep), good for beginners in this field
I found this to be a very good starting point for researching different types of bonds. It does cover in good detail about how the Bonds are brought to the market, the commission structure involved, also touches upon the documentation standard followed for indentures and bond insurances.

I found the coverage of Mortgage backed securities pretty good! Found interesting coverage on how to structure CMOs, how different tranches and different types of bonds (e.g. non-sticky Jump Z Bonds) could be created based on the payments received on the mortgage pools.

All in all I found this book pretty good, definitely worth the money (especially when borrowed from the library) and time. I would not treat it as a reference for taxation information, also while on the topic of taxation, the Munis deserved a more extensive coverage.

A Solid Foundation - Not Too Dry
If you've read any number of books on investing, you know they can be tedious.But this book is relatively crisp and to the point.When the details of a subject are beyond the scope of a 200 page read, the book says so.If you are doing anything related to bond investing (even programming!) you should get started with this book.

Very Helpful
As a person studying for the Series 7 examination, this document was extremely helpful in understanding the test preparation material.Other people may say there are errors in the document, well, if that is true, then the test-prep books, and the test itself is wrong.

This is a good book people.It can tell you lots of things.Its only downside is that it needs more numerical examples and more mathematical examples to show the concepts behind yield to mature data.

Good starting point for research on this topic
I found this book to be very helpful in understaning this topic. I would recommend it to people new to the industry as a good starting point to learn about the bond market. ... Read more