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| Definition: |
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The drop-lock bond (DL bond) combines the features of both floating- and fixed-rate securities. The DL bond is issued with a floating-rate interest that is reset semiannually at a specified margin above a base rate, such as six months LIBOR. This continues until the base rate is at or below a specified trigger rate on an interest fixing date or, in some cases, on two consecutive interest fixing dates. At that time the interest rate becomes fixed at a specified rate for the remaining lifetime of the bond.
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| Source
Publication: |
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Coordinated Portfolio Investment Survey Guide, Second Edition, International Monetary Fund, 2002, Washington DC. Appendix VI: Definition and Description of Instruments.
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| Statistical
Theme: Financial statistics |
| Created
on Thursday, August 01, 2002 |
| Last
updated on Thursday, August 01, 2002 |
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