The new bonds' long maturity and low interest rates should make debt service manageable.
They are headed up and you will lose money in long maturity bonds if you own them.
That's due to the exceptionally long maturity of our debt - which I have discussed many times before.
Most analysts on Wall Street expect the Federal Reserve to announce QE3, another round of quantitative easing, where the Federal Reserve buys additional long maturity U.S. Treasuries, and Fannie Mae and Freddie Mac debentures and mortgage-backed securities.
If interest rates shoot up, people holding long-maturity bonds can see 20% or even 40% losses in market value.
As the famous theory of Diamond and Dybvig explained, institutions that have long-maturity assets with uncertain returns and short-maturity liabilities that are intended to be risk-free are innately subject to devastating runs.
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The National Development and Reform Commission, the top economic planning agency, is in charge of long-maturity bonds typically issued by major state-run enterprises, while the securities regulator runs a separate exchange-based bond market for listed firms.
In an increasingly complex and unstable world, it may be adaptive to put off maturity as long as possible.
But five years old is first grade, and first graders have a long way to go to reach maturity.
Securities firms argue that this need not matter as long as investors hold the bonds to maturity.
When interest rates were plunging in 2000--03, these geniuses decided to shorten the average maturity instead of locking in long-term low yields.
As I have pointed out here before, if the Debt Management Office hadn't done quite such a brilliant job in borrowing for long maturities - such that the average maturity of UK debt is just under 14 years - the UK might well be like Italy in finding it very hard to borrow at any price right now.
Sale's physique is not the kind that scouts typically look for, but his talent, maturity and work ethic have made long-term durability concerns an afterthought.
Broadly, though, all banks earn money through some combination of maturity transformation (borrowing short and lending long), taking credit risk (ie, lending to people who may not pay it back) and earning fees and punting on their own account in the capital markets.
This is not a problem if you hold a bond to maturity (unless you recently bought a newly issued long-term bond), but it will adversely impact bond fund prices.
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With some of its earlier backers now gone, I believe Facebook lacks the maturity in its executive team to go after a long term play like this, that requires commitment to infrastructure investment.
He responded that, since stocks are infinite maturity instruments, they should logically be priced off of long-term interest rates.
Meanwhile its February 2040 maturity tightened by four basis points sitting 130 basis points above the 30-year long bond.
He recommends investors look at long-term bonds with 10 years or more between the bond's call date and maturity date.
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Our research consistently demonstrates that short-term (five year maturity or less) paper has historically a much better risk-return tradeoff than long-term bonds.
It required banks to write down the value of assets (such as long-term bonds) to market value, even if the banks intended to hold them until maturity.
However, even with 2010's 13 hatchlings, it will take a long time to see a substantial boost in numbers because each Siamese crocodile takes at least 15 years to reach sexual maturity.
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