Important Terms

Damping in fine
A common practice in the French market, the damping in fine involves the redemption of one's entire debt all at once, on the date of maturity.

Assimilation is the technique used by the French Treasury Department which allows securities issued over time to be consolidated into a single loan or line (or even "strain").

The coupon is the interest paid to the bondholder. For OATs, the coupon is paid annually and is a fixed percentage of the nominal (which is indexed in the case of OATi and OAT€).

The interest rate stated on a bond when it is issued. It is usually published with the bond price. At the time of the transaction, the seller receives the price of the bond and the accrued interest.

Dividend date
The date from which interest on a bond starts to accrue. The dates of tenure of all OATs are made public by the French Treasury Department on a certain date.

Coupon detachment
A payment made by the issuer to a bondholder of periodic interest. After ex-dividend day, the bond is called "full slip".

Maturity or Expiration
Date on which the debtor (the State) must repay the creditor (here, the owner of the OAT).

Secondary market
Market in which the securities traded already issued. In contrast, the primary market is made up of newly-issued securities.

English translation of a market maker.

The nominal value of a bond is one to which a nominal interest rate is applied to determine the annual coupon. The nominal amount of an OAT is 1 euro.

What the borrower must repay the lender to settle a debt. In the case of OATs, main is synonymous of nominal.

Then year-over-year growth rate of an investment over a certain period of time. This rate would give you the current price of a bond if you discount all future cash flows attached to it, that is, all the repayments of principal and annual interest.

Nominal interest rate or facial
It is the interest rate that applies to the amount of the bonds, which is included in the debt agreement of the title.

Real interest rate
An interest rate that has been adjusted to remove the effects of inflation to reflect the real cost of funds to the borrower, and the real yield to the lender. The real interest rate of an investment is calculated as the amount by which the nominal interest rate is higher than the inflation rate.

Market maker
Its role is to ensure that there is a sufficient amount of liquidity in the market. The market maker constantly displays buy / sell prices for a minimum amount on a specified list of shares. - Markets Paris - Markets Paris

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