Pure Yield Pickup Swap
A transaction in which bonds with lower yields are swapped for bonds with higher yields. Investopedia Says:
Pure yield pickup swaps are usually a risky investment strategy. Investors using this strategy expose themselves to higher interest rate risk since higher yielding bonds will have a longer term to maturity. In addition, high yielding bonds are usually of lower credit quality, thereby exposing the investor to higher default risk. Related Terms:
Bond Swap
Credit Rating
Default Risk
Swap
Yield |