If banks are sitting on cash, the ­incentive to finance through a TOB is minimal. ver. If market dynamics stay this favorable, more hedge funds and dealers could take advantage of the environment and the market could see “a re-leveraging scenario” in the near-term, according to Matt Fabian, managing director at Municipal Market Advisors, an independent research firm. Leverage enters the trade because when the trust issues the floating-rate note, it effectively borrows cash from the money market funds against the long-term collateral, and the investor can use that cash to finance the purchase of more bonds. Another reason is the collateral is much less reliant on bond insurance, so the quality of paper in the trade is fundamentally higher than it was before. Theology of the Body Course (10 hours) via ZOOM Sat 16, Sun 17, Sat 23, Sun 24 May 2020,1.30 pm – 4.00 pm. Tob name meaning, Biblical baby Girl name Tob meaning,etymology, history, presonality details. Este fenomeno se puede explicar debido a los diferentes criterios de exclusion e inclusion utilizados en los estudios, y a las diversas variables analizadas, que no permiten tener una homogeneidad en los resultados reportados. As the accompanying chart indicates, for instance, a typical TOB trade in March 2007 might use six times leverage to deliver an annual return of 9.6%. Recently, several modifications of the Belgian Stock Exchange Tax regime (TOB/beurstaks) have been enacted.For recall, this tax generally applies to secondary market transactions (with the exception of redemptions of own units by certain investment funds) concerning certain financial instruments entered into by Belgian investors, be it through a Belgian or a foreign financial intermediary. He noted, for instance, that ratios are a little higher now than they were three years ago when TOB structures were booming. “But now, even though your allowed leverage is maybe less than half of what the liquidity sponsor used to allow you to do, the spread is so great that it even more than makes up for the fact that the leverage is down.”. root Definition “I couldn’t be more pleased to learn that Alabama will be the new home to the United States Space Command," said Alabama Gov. State Treasurer Dale Folwell said his office was rewarded for staying the course on a decades-long conservative management strategy. The success of taxable Build America Bonds — which has limited the supply of tax-exempt debt necessary for TOB programs — is one reason. What is the meaning of TOB? Adjective and noun טוב ( tob ) means good; noun טוב ( tub ), describes a good thing or goodness, and noun טובה ( toba ) denotes welfare. Powell, speaking on a livestreamed event, said interest rates will be raised "no time soon" and there will be plenty of notice "well in advance of active consideration.". Terms of Business. However, there is a TOB equivalent in the taxable market, called a taxable repurchase agreement. This page is all about the meaning, abbreviation and acronym of TOB explaining the definition or meaning and giving useful information of similar terms. That’s more than the five to 10 trusts rated weekly a year ago, but well below the pre-crisis days when upwards of 50 trusts were rated each week, he said. Problems aren’t only confined to the supply side. “Different sponsors had different hurdles, but broadly speaking, it had to have two double-A ratings —¯Aa3 didn’t even work for some of the sponsors. Lower leverage means less risk, and generally that means less potential for profit. Tob (good), The land of, a place in which Jephthah took refuge when expelled from home by his half-brother, (Judges 11:3) and where he remained, at the head of a band of freebooters, till he was brought back by the sheikhs of Gilead. Tob Rhyming, similar names and popularity. Tob. The reason is higher ratios indicate cheap munis, so when ratios rise more investors will be attracted to the TOB ratio trade. Another is demand: the program uses leverage, and investors don’t have much appetite for risk these days. TOB: Triangle-Based Omni-Purpose Building (power generation system) TOB: The Ordinary … Al analizar comparativamente los datos, existen grandes diferencias reportadas en la literatura sobre TOB. “Back in the spring of 2007 when you were allowed to leverage 10 or 12 times, the carry wasn’t very good per bond, because that spread was very thin,” said Jed McCarthy, managing member of muni-only hedge fund 1861 Capital ­Management in New York. ? In a different fashion, then, BABs are pushing down the yield curve just as TOBs once did. Three years earlier the six-month average was 311 basis points. A TOB program is a financing mechanism that allows investors to make a leveraged carry trade, borrowing at short-term rates and investing in higher-yielding long-term bonds, and then pocketing the spread. If it carries a rating at all, the residual will be graded lower than the floating rate because it is the “first-loss” certificate, but the risk is compensated by the higher yields it derives from the long-term collateral, minus the floating rate and some fees. In addition, “the cash-flow portion of the trade has possibly never been better,” he said, speaking of the steep yield curve. For banks involved in proprietary trading, one such reason is that leverage isn’t a necessity given how much cash banks are sitting on. To earn a profit on those thin margins, TOB investors in 2007 had to increase the risk on their bets by leveraging at 10 times or more. T.O.B. Meaning ***** TOB: Tender Option Bond ***** TOB: Takeover Bid **** TOB: Terms of … The underlying collateral in the trade was often enhanced by bond insurance, so when the guarantors were downgraded throughout 2008, certificates derived from the collateral no longer met the high-grade requirements. “Even though TOBs are an attractive way to finance munis, potentially, because of the level of financing, you have a supply disconnect,” another TOB participant said. And in that case, then it’s 'Game On’ again.”. What is the meaning of Tob.? The group specifically revised six of its model disclosure documents for risk disclosure including floating rate notes, fixed-rate bonds, interest rate swaps, forward delivery bonds, tender offer bonds and variable rate demand obligations. Possible TB meaning as an acronym, abbreviation, shorthand or slang term vary from category to category. "global warming" Like the unhedged carry trade, the ratio trade, as it is called, can also be beneficial to the wider municipal market by keeping relative values in check. Once the financial crisis forced ­investors to unwind their positions, that volume fell to about $60 billion in early 2009, but in recent months new activity has pushed the volume up to around $80 billion. To date this month, Municipal Market Data indicated the spread between two years and 30 years in the triple-A general obligation yield curve averaged 337 basis points. In trader parlance, the floater certificate is known as the tender-option bond. “Most of the problems that came about in 2008 were really brought on by very highly leveraged structures on fairly weak underlying bonds, and as a result, when things went wrong, there was not enough liquidity to unwind those vehicles, and that’s why you saw plummeting prices,” a Wall Street banker said recently. PSP, HIPAA Even if tax-exempt issuance were flooding the market, the interest in starting TOB programs may be more tempered than in previous years as appetite for leverage has diminished. By giving borrowers the option of issuing in the taxable market, BABs have limited the availability of traditional munis that could be placed into TOB trusts. In fact, several other dynamics are holding a strong resurgence back. The floater certificate, or senior note, provides a short-term variable-rate with a put option. For reprint and licensing requests for this article. The dearth of eligible long-term ­tax-exempt bonds in the current market, ­however, also reduces the incentive for banks to create leverage. “The first source of funds to purchase bonds should be the cash an investor has on hand, such as the equity raised by mutual funds as money has migrated out the municipal curve in search of yield,” said Eric Vandercar, manager of ­municipal funding and liquidity at Morgan Stanley. To some, the prospect of exotic ­products returning to the market with force might not sound too welcome, but participants familiar with the trade point out that the risks associated with TOB programs have largely been reduced. If banks are sitting on cash, the ­incentive to finance through a TOB is minimal. “Frankly, the tax-exempt yield curve is steeper than makes sense for a lot of reasons right now — you could easily see that flatten quite a bit more,” he said. In other words, TOB programs and BABs could work together to take long-term tax-exempt bonds out of the market — TOBs through purchase, BABs through substitution of taxable debt for tax-exempts — which would drive borrowing rates for municipal issuers even lower. Please note that Type of Bill is not the only meaning of TOB. “When muni-to-Treasury ratios would get out of whack, these guys would come in and buy a little more to support their money-making trade efforts,” said Tom Kozlik, municipal analyst at Janney Capital Markets. BABs cannot be deposited into the trusts because the tax-exempt floaters must be backed by tax-exempt collateral. But, he added, “it could just magnify what’s taking place.”. Without the same leverage as before, few are expecting the tender-option market to become as influential as it was before the credit crisis. 1. The SIFMA municipal swap index — a widely used barometer of variable-rate demand obligations — peaked at 7.96% that month, compared to its current 0.24%. ISO 3166-1 alpha-2 code for Bouvet Island. There may be more than one definition of TOB, so check it out on our dictionary for all meanings of TOB one by one. The verb טוב (tob) means to be good or pleasant, and ultimately to be sustained or sustainable, first relative to society but ultimately to the universe at large. The impact on long-term rates was pronounced: the triple-A GO yield in two years versus 30 years flattened to a six-month average of 54 basis points between January and June 2007, according to MMD. 13 definitions of TOB. For investors, the attraction for the TOB program comes from the fact that the municipal yield curve is naturally steep, compared to other assets. design, construction. Whether the 35% BAB subsidy is gradually reduced to 28% or some other figure, McCarthy said that wouldn’t really matter — it would just change where the ratio ceilings and floors would go. At Yahoo Finance, you get free stock quotes, up-to-date news, portfolio management resources, international market data, social interaction and mortgage rates that help you manage your financial life. In order to be hurt, something has to be alive, and proprietary trading died in the financial crisis, they said. “A majority of these long-dated, high-grade bonds are going to BABs and other programs, so you’re not getting the supply that you need to support an extension of the market.”. “The reason you would increase leverage is because you want to buy more muni bonds, but while the financing mechanism is attractive right now, there may be reasons why you don’t care to have more munis.”. It should be noted, however, that the Treasury curve flattened around the same period, so other market factors were at work in addition to spread arbitrage. In the current climate, the investor could reduce leverage to just two times — cutting the risk of the trade by a third — and earn an annual return of 10.6%. Find the latest TOD'S SPA EO 2 (TOB.F) stock quote, history, news and other vital information to help you with your stock trading and investing. But while the impact of BABs may be positive for municipal-to-taxable ratios, the overall impact on tender-option bond programs may not be wholly positive. Finance is the study of money management and the process of acquiring needed funds. Please note that Transfer of Business is not the only meaning of TOB. The yield of the residual certificate changes in opposition to the floating-rate, so it is often called the “inverse floater.”. ,random TOB. Kay Ivey. 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