nomenclature would more accurately convey the underlying structure of the bonds and be more familiar to the international investor. (HBS case, p11) Moreover, even though the market had been running quite well, the government decided to offer tax exemptions to help with the market growth. Rather than exempting income from interest from the Bonds from income tax, interest from mortgage-backed securities is exempt from profits tax. (HBS case, p11)Discover Benefits of Fixed-Rate Debt and Mortgage-Backed Securities in the U.S. and Hong Kong
1. Fixed-rate debt is debt that has a fixed interest rate. When there is a fixed interested rate it means that the market movements do not have any effect on the rate of this debt. Fixed-rate debt provides the basis for a fixed-rate mortgage, which is, essentially, “an interest rate that remains the dame … Read more