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The bonds are CUSIP 74514LE86, with an 8.00% coupon, issued with OID (issue price of 93) for a YTM of 8.727%.
The requirement is that the face value of bonds in a trade not be less than $100K; not that the value traded be less than $100K. So if bonds trade at issue price (93), you can have a $100K denomination trade where only $93K of money is exchanged.
Nearly all the trades were above the issue price (i.e. at a premium). None reached 100 (which would be a premium of over 7%). The 10:47 trade on 3/12 the article gave as the highest price of 100 would thus have represented a premium. Calling this "100 cents on the dollar" is at best confusing.
In any case, that trade was not for $25K face value, but for $400K face value. The price was 96 5/8 (not 100) for a yield of 8.339% (i.e. below the issue yield).
The decline mentioned at the end of the article was just to 92 (vs the issue price of 93). This resulted in a yield of 8.838%, not "about 8.73%" as reported in the article. That latter rate was the rate at issue, i.e. you'd need a price of 93 for that yield.
Maybe some of the 75 trades mentioned in the article in denomination (not transaction) amounts under $100K were cancelled, because I count only 48.
The point of the article (about improper trades because of the small lot size) may be correct; but most of the figures are wrong. My data are from EMMA http://emma.msrb.org
Comments
The bonds are CUSIP 74514LE86, with an 8.00% coupon, issued with OID (issue price of 93) for a YTM of 8.727%.
The requirement is that the face value of bonds in a trade not be less than $100K; not that the value traded be less than $100K. So if bonds trade at issue price (93), you can have a $100K denomination trade where only $93K of money is exchanged.
Nearly all the trades were above the issue price (i.e. at a premium). None reached 100 (which would be a premium of over 7%). The 10:47 trade on 3/12 the article gave as the highest price of 100 would thus have represented a premium. Calling this "100 cents on the dollar" is at best confusing.
In any case, that trade was not for $25K face value, but for $400K face value. The price was 96 5/8 (not 100) for a yield of 8.339% (i.e. below the issue yield).
The decline mentioned at the end of the article was just to 92 (vs the issue price of 93). This resulted in a yield of 8.838%, not "about 8.73%" as reported in the article. That latter rate was the rate at issue, i.e. you'd need a price of 93 for that yield.
Maybe some of the 75 trades mentioned in the article in denomination (not transaction) amounts under $100K were cancelled, because I count only 48.
The point of the article (about improper trades because of the small lot size) may be correct; but most of the figures are wrong. My data are from EMMA http://emma.msrb.org