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But inflation doesn't just erode the value of bonds; it also erodes the value of cash.
S&P argues that any exchange or restructuring that diminishes the value of bonds would trigger default.
Investors typically take losses of one-third to one-half of the value of bonds when sovereign debts are restructured.
That would enhance the value of bonds whose prices are already buoyed as the government buys back the high-cost debt with money from budget surpluses.
Strong growth is generally considered bad for bonds because it raises the risk of inflation, and high inflation lowers the value of bonds over time.
Stable or lower interest rates increase the value of bonds owned by banks, brokers and insurers, and increase demand for mortgages and loans.
Similar(15)
Higher interest rates can reduce the value of bond holdings and erode earnings growth if the demand for borrowing wanes.
In that quarter the gross value of bond issues around the world totalled $407 billion.
Financial shares fell on concern that rising interest rates would reduce the value of bond holdings and crimp demand for mortgages and loans.
(Coupon divided by value of bond x 100).
Therefore, the value of bond ellipticity can be considered as the measure of bond stability.
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