A bond swap is a state of affairs where a bondholder makes decides to sell one or more at present held bonds such as Surety bond or Mortgage bond and purchase other bonds, which are measured to be of equal or same market value. Both the purchase and the sale take place simultaneously, efficiently exchanging or swapping one bond or set of bonds for new ones. Bond swapping is as well recognized as an efficient means of expanding or shortening the maturity of the bonds in the investment portfolio.
Bond swaps are further used to switch over bonds within the collection for other bonds with a different rating. The investor might select to sell a bond with a higher rating and use the income to buy a bond with a lower rating, again as a means of placing the assets of the portfolio to obey with a given investment strategy.
Bond swaps are further used to switch over bonds within the collection for other bonds with a different rating. The investor might select to sell a bond with a higher rating and use the income to buy a bond with a lower rating, again as a means of placing the assets of the portfolio to obey with a given investment strategy.