yield burning


yield burning
A municipal bond financing method. underwriters in advance refundings add large markups on US Treasury bonds bought and held in escrow to compensate investors while waiting for repayment of old bonds after issuance of the new bonds. Since bond prices and yields move in opposite directions, when the bonds are marked up, they "burn down" the yield, which may violate federal tax rules and diminishes tax revenues. Bloomberg Financial Dictionary

Financial and business terms. 2012.

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  • Yield Burning — was a method by which major Wall Street US municipal bond dealers cheated the federal government out of millions of dollars of revenue. [http://query.nytimes.com/gst/fullpage.html?res=9D05E6DC123CF937A25757C0A9649C8B63 scp=2 sq=michael+lissack st …   Wikipedia

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  • Michael Lissack — is a realtor and business consultant in Naples, Florida,[1] who was formerly a managing director in the municipal bond department at Smith Barney. He is notable as the whistleblower who exposed a yield burning scandal in the 1990s, whereby… …   Wikipedia

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