What is a Dollar Bond?
Dollar bonds are municipal bonds that are quoted with a specific dollar price rather than basing the quote on a percentage. This type of bond is relatively common and is issued regularly. A dollar bond is also traded based on the dollar price and not on the yield to maturity like other types of bonds. An alternative definition of the dollar bond is also focused on using a dollar price rather than a yield to maturity. In this scenario, the dollar bond is a term applied to any type of bond issued that is quoted and traded in United States dollars. Within the perimeters of this definition, the bond in question can be a bond issued by municipality in the United States, or by a foreign corporation that has a presence within the USA. In both approaches, the key factor is the use of the dollar price rather than a percentage. Investors who prefer the more simplistic approach often find the dollar bond is more to their liking. Because the quote is in an identified currency, it is possible to pr
