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In the following exercise, the issuer doesn't matter. It's just a name, not an endorsement or a warning. I could have picked anyone else's bonds.
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If you run a bond scan on BofA's debt, asking to see anything that offers 5% or more, you'll end up with 150 or so data points. But of those, only the following are "maximal", meaning nothing of shorter maturity offers a higher yield.

Coupon Maturity YTM
5.00 12/15/14 5.02%
5.05 05/15/15 6.25%
5.25 12/01/15 6.59%
5.75 08/15/16 7.01%
5.42 03/15/17 7.02%
5.49 03/15/19 7.62%
6.80 11/15/26 7.68%
6.50 09/15/37 7.76%

If you're like me, even a short list like that is hard to deal with, because stating the maturity in terms of its date, instead of how many years away it is, obscures the relationship between the holding-period (HP) and the reward-offered. To see how this might be so, compare the preceding list to the following one.

Coupon HP YTM
5.00 3.1 5.02%
5.05 3.6 6.25%
5.25 4.1 6.59%
5.75 4.8 7.01%
5.42 5.4 7.02%
5.49 7.4 7.62%
6.80 15.1 7.68%
6.50 25.9 7.76%


Which list you'd rather look at is pretty obvious, right? and such a list is easy to create when you're doing your downloading into a spreadsheet of scans done at E*Trade or Zions Direct by using the YEARFRAC function. But either list plots as easily as a scatter-plot, and either chart is as easy to interpret. So, doing the conversion isn't necessary if constructing a chart of the issuer's yield-curve is always your next step. Regrettably, TMF doesn't offer the formatting capabilities that would facilitate charting. But a rough approximation can be achieved by using some very crude, ASCII art techniques.

A Chart of Bank of America's Yield-curve
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8.00% - - - - - - - -
7.75% - - - - - - - X
7.50% - - X - X - - -
7.25% - - - - - - - -
7.00% - XX - - - - - -
6.75% - - - - - - - -
6.50% - X - - - - - -
6.25% - X - - - - - -
6.00% - - - - - - - -
5.75% - - - - - - - -
5.50% - - - - - - - -
5.25% - - - - - - - -
5.00% - X - - - - - -
4.75% - - - - - - - -
0yrs 4yrs 8yrs 12yrs 16yrs 20yrs 24yrs 28yrs


"Yes", the chart is crude, because the granularity is so coarse. But, nonetheless, some important relationships are revealed, the first of which is that the yield-curve is NOT a classic, gradually-sloping one. The yields offered by near-by maturities are nearly vertical. The yields offer by longer-dated maturities are nearly horizontal. This is a type of yield-curve that Jack noticed several years ago and got to wondering about in this forum. I didn't have an answer, either. But I could confirm that was what I was also seeing. Nearly every issuer's yield-curve seemed to "hinge" in the middle, with the left-hand portion being very steep, and the right-hand portion being nearly flat. And that phenomenon has persisted, as you can confirm by building yield-curves of your own from the data you are looking at as you run your bond scans.

Charlie
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