Selling Bond Coupons

Discussion in 'Strategy Development' started by chitowninvestor, Jun 2, 2010.

  1. I have a little over a $1 million in AA rated, corporate bonds with a high yield, maturing in about 10-yrs. I was told I can sell the coupon interest rate on these bonds while still holding the principal bond.

    What is the market and sources for selling off the coupon interest rates from my corporate bonds?
  2. I would think the private banking departments of Goldman, Morgan, etc. could structure a deal for you. If I might ask though, why not just sell or borrow against the bonds if you need cash now?
  3. I think what you are refering to are "strips". Major banks strip coupons from their bonds and then sell coupons and principal to clients. You can trade an strip but you can't strip a bond yourself as long as I know.
  4. sjfan


    And you can't strip AA bonds. Only treasury bonds are stripped on any kind of regular basis;

    The OP could also potentially be talking about asset swaps... but those aren't available to retail clients - it's also fairly pointless for non-institutional players.