How To Read A Bond Table

How To Read A Bond Table

Bond tables are usually published in financial news publications and are used to compare different bonds. They will usually include the most basic information, including the issuer of the bond, the coupon payments, the maturity date, the bid price and the yield. Understanding how to read a bond table properly is crucial to making wise investment decisions.  Since you would not purchase a car or a home without shopping around for the best deal, bonds should be compared to other similar assets, but also to different assets such as equities to ensure that you have found the asset with the optimal level of risk and return.

Column 1-Issuer

The first column in a bond table will usually list the issuer of the bond. This can include not only large corporations, but also different levels of government.  Investors who tend to be more conservative should only look at bonds that are issued by the government or highly reputable corporations.  Having said that, the first column will usually give you a good clue as to how risky the bond is.

Column 2-Coupon

Coupon payments are simply the interest rate that will be earned on the specific investment. The coupon payments listed in the bond table will be fixed, meaning that they will not vary over time regardless of economic conditions. Keep in mind that the coupon rate will be listed as the annual rate. Since most bonds pay the coupon semi-annually, the rate that you earn per payment will be divided by two. For example, a coupon rate listed as eight percent means that the investor will earn four percent twice a year.

Column 3- Maturity Date

Maturity date refers to the date when the investor will receive the principal payment. For example, if an investor purchases a bond that is worth one thousand dollars at maturity, this is the amount that he/she will receive. Maturity dates are quoted in bond tables as the month/date/year. However, only the last two digits of the year will be quoted. For example, 13 for 2013.

Bond table.

Column 4-Bid Price

The bid price gives the investor a good idea of how much other investors feel the bond is worth. It is always quoted in relation to the bond’s face value which is often $100. If a bid price of 97 is quoted in a bond table, it means that the bond is trading at 97 percent of its face value, or in this case 97 dollars.

Column 5-Yield

A bond’s yield is described as the return an investor will earn on the bond until it matures. It is usually quoted as an annual rate in bond tables. If a bond is callable, meaning that the issuer can buy it back before maturity, it will usually be indicated by a c in this column.

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