medium · Debt Capital Markets bond-instruments-structures
What is meant by the 'bond floor' in the context of yield analysis?
- The minimum coupon rate the issuer is permitted to set when pricing the deal.
- The bond's par value, which functions as the final principal repaid at the stated maturity date.
- The lowest market price the bond can reach before the issuer is formally considered to be in default.
- The value of a bond as a straight, option-free instrument, excluding any embedded options.
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