Advice on 10 Year Government Bond Rate

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Q: Where about in yahoo finance can I find historical data on the government 10 year bond rate?

A: Here:

http://finance.yahoo.com/q/hp?s=%5ETNX

Q: URGENT: 10-year sterling government bond rate. Help please?
Hello

I’m rushing a project and I need this data very badly. I’ve spent the last 5 hours searching for this. Where can I find it?

I need the rates for 2002 – 2006.

Thanks, help please

A: http://213.225.136.206/mfsd/iadb/index.asp?Travel=NIxIRx&levels=1&FullPage=X4051&FullPageHistory=X4051&Nodes=X4051X4052X4053&SectionRequired=I&HideNums=-1&ExtraInfo=true&A4058XBMX4051X4052X4053.x=6&A4058XBMX4051X4052X4053.y=6

Statistical interactive database

Q: What’s the interest rate on a 10 year $1000 government bond?
What determines how much interest is charged on this type of bond?

A: Current yield is 3.448%

Actual rate determined through an open auction. Interest isn’t CHARGED, it is PAID to the holder.

http://www.treasurydirect.gov/RI/OFNtebnd

Q: What is the 10-year government bond yield for Australia?
Hi, I was wondering whether anyone knows how I can get a table which lists the 10-year bond yields for Australia? I tried the RBA site (but it was a bit hard to navigate) and Yahoo Finance, and I’m not sure where bond yield rates are located.

So, what I need is a link to an actual website which has that data.

Thanks!

A: http://online.wsj.com/mdc/public/page/2_3022-govtbonds.html?mod=mdc_bnd_pglnk

Q: How can I know/find 1 year, 10 year and 30 year government bond spot rates?

A: www.bloomberg.com click on Market Data, than Rates & Bonds

Q: why is the 10 year and 20+ year gov bond rate so low?
now the dollar is falling and gold is increasing. how can the long term bond rate be so low? who is buying the bonds? china is not buying anymore, in fact they are selling. why don’t investor buy foreign government bond in foreign currencies?

A: Because interest rates are still so low.

Interest rates and bond prices have a direct relationship.

If rates were 20% like they were under Pres. Carter, bonds would have a similar corresponding number.

Interest rates are likely to rise and so will bond yields, but bond prices will fall. There is an inverse relationship between bond prices and yield.

More on Bonds

http://en.wikipedia.org/wiki/Bond_%28finance%29

Q: where do u find the yeild rate in Australian Government t-bonds?
where can u find the average yeild rate for the past 5 years in 10-year Australian Government T-bonds?

Or just the yeild rate for 10-year Australian Government T-bonds?

A: http://www.rba.gov.au/Statistics/Bulletin/

Then you have to open up “Capital Market Yields – Government Bonds – Monthly – F2″

This has data on bond yields of 10 years dating back to 1969

Q: Australian Government – Kevin Rudd.?
Today I received this email …
is this correct? (below)

NOW THIS IS UNDISPUTABLE!!! NO MATTER WHAT YOUR POLITICAL LEANINGS.

Quoted by : Ross Greenwood of Money News.
Right now the Federal Government is at pains to tell everyone – including us the mug-punters and the International Monetary Fund that it will not exceed its own, self-imposed, borrowing limits. How much? $200 billion. And here’s a worry. If you work in a bank’s money market operation; or if you are a politician; the millions turn into billions and it rolls off the tip of the tongue a bit too easily. But every dollar that is borrowed, some time, has to be repaid. By you, by me and by the rest of the country.
Just after 5 o’clock tonight I did a bit of maths for Jason Morrison. But it’s so staggering its worth repeating now. First though; here’s what Chairman Rudd has been saying about – what he calls – these temporary borrowings. Remember Those Words : Temporary Deficit. But the total Government debt could end up around $200 billion. So here’s a very basic calculation … I used a home loan calculator to work it out … it’s that simple. $200 billion is $200,000 million. The current 10 year Government bond rate is 4.67 per cent. I worked the loan out over a period of 20 years.
Now here’s where it gets scary … Really scary. The repayments on $200 billion come to more than one and a quarter billion dollars – every month – for 20 years. It works out we – as taxpayers – will be repaying $154 billion in interest and principal every year … $733 for every man woman and child – every year. The total interest bill over the 20 years is – get this – $108 billion. Remember, this is a Government that just 18 months ago had NO debt . NO debt. In fact it had enough money to create the Future Fund to pay the future liabilities of public servants’ superannuation … And it had enough to stick $20 billion into the Building Australia Fund last year …

Money News Presenter, Ross Greenwood
Who were the idiots who voted these spin-doctoring bozo’s into office? (not me,mate)

Alan Jones Comment – this is frightening: Hmmmmm??

He continues… A note that was sent to me which explains that the six leading members of the Government from Mr. Rudd down, the top six have a collective work experience of 181 years, but only 13 in the private sector.

If you take out of those 13 years the number that were spent as trade union lawyers, that total 11, of the 181 years only two years were spent in the private sector.

So the people who will rack up a net Federal debt of a minimum of $188 billion, the highest in our history, have virtually no experience in business.

So out of those 181 years:

- no years spent running their own business
- no years spent starting their own business
- no years spent as a director of a family business or a company
- no years as a director of a public company
- no years in a senior position in a public company
- no years in a senior position in a private company
- no years working in corporate finance
- no years in corporate or business restructuring
- no years working in or with a bank
- no years of experience in the capital markets
- no years in a stock-broking firm
- no years in negotiating debt facilities with banks
- no years running a small business
- no years at the World Bank or IMF or OECD
- no years in Treasury or Finance.

But these people have plunged Australia into unprecedented debt, and now threaten to torpedo employee share schemes which they plainly don’t understand.
Well, in a way you can’t blame them. It is clear the electorate did not do their homework, because the Gov’t is there by right.
If you have read this, you may like to pass it on to your friends as you, them and me and our grandchildren, will be repaying the these debts for years to come…………………………………….
…….. and that scares me for the welfare of our children and grand children!

This is what a fiscal conservative does with our money. I’ve been around long enough to see several cycles of government and the pattern seems to be that Labor run us into the red from Whitlam onwards and when the cart is far enough into the poo, we vote in a conservative government who set about repaying the debt and building wealth. When we are in good enough shape financially, we vote them out and give it back to labor to spend all over again. Sound familiar?

This time we have really blown it. They have not only spent our kids future fund that the Libs built up for us but they have also spent another 200 Billion that we don’t have to put us back in the poo again…. and they call us the lucky country…

(end of email)

A: Alan Jones.

Isn’t he the one who is in bed with the banks and the Capitalist side of the world?
He can’t see past his next sponsorship deal!

Since he changes his beliefs, as fast as he changes banks (and his statements about them), what will he say, when, or if the Liberal Party, gains control of the government?

Q: Why are Government Bond Interest rates so low?
Everyday when i read financial news, i see that government bonds for 10 years are at 4% interest rate or 5% interest rate.
Why the interest rate is so low? If we buy those bonds for 10 years for JUST 5% interest rate, how will it help us? Firstly, the interest rate is so low and that too for investing amount for 10 years.
Secondly, we can get better returns if we invest money in Gold or some shares.
Thirdly, the rate of 5% cannot even guarantee that our invested money wil appreciate, because IF inflation moves up and higher than 5%, then we will actually get less than we invested after 10 years.

Then, my question is why are Government Bonds so popular? Why do people buy it inspite of lower returns?
Just read that Spain Government Bonds for 15 years is for 5% interest rate. Who will buy those for such lower interest rate?

A: the return is that low because the risk is that low. investing in gold or stocks will give you more risk. thus more reward. 5% is actually quite high for a government bond. government bonds are usually near the 3-3.5% The US and spain government bonds pay more because their financial position has worsened a lot since 2007.

on a sidenote that 5% is actually substantial since the interbank loan rates are near 0.1-0.3% at this time. there is only a 1% difference between market rate and interbank rates in a normal economic setting.

this is a clear indicator that the central banks still think the economy needs stimulating.

Q: Bond Price new market value given change in interest rates?
If interest rates on new issues of $100 Government Bonds rise from the previous 8% p.a. to the new rate of 10% p.a., calculate the new market value of the old 8% Bonds given that interest is payable half-yearly and the Bonds have the 10 years to maturity:

The Answer is $87.54. How do i get to this solution????

A: The following symbols are used to designate present value factor:
(pv1, i, n) = present value of $1 discounted at i%, n periods from present
(pva, i, n) = present value of an annuity of $1 discounted at i%, for n periods

Market rate is 10%, and stated rate is 8%
Market value:
The formula is $100(pv1, 5%, 20) + 4%($100)(pva, 5%, 20)
Refer to the PV tables at the link.

= $100(0.37689) + 4%($100)(12.46221)
= $37.689 + $49.84884
= $87.53784, rounded to $87.54

Q: Government Bond?
I’m currently doing an assignment on a $5,000 investment. I chose to invest in a bond but the problem is that my teacher wanted an interest rate on the bond and how much the value would be in 10 years. I’ve search and couldn’t find any interest rates on a government bond. It would be of great help if some one can tell me where to get the information on the internet. Thanks in advance. If you know a web site please list it.

A: US Treasury Education

http://www.ustreas.gov/education/

Rates on all current US Treasuries

http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield.shtml

Historical Rates by Year

http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield_historical_main.shtml

Buy Treasuries from the USG direct

http://www.treasurydirect.gov/

Make sure my name goes on the paper too

Q: What coupon rate should the company select, if it is to sell at par value?
Big time company is planning to raise $15 million by selling 10-year bonds. The bond rating agency have told the company that the bonds will have an A rating. Currently the difference between the yield to maturity of A-rated corporate bonds over similar-maturity Government of Canada bonds is 150 basis points (1 basis point equals .01 percentage points). If 10 year Canada bonds are currently priced to yield 5 percent, what coupon rate show Big Time select if the new issue is to sell at par value?

Any and all help would be greatly appreciated!

A: 150bps + 5% = 6.5% coupon rate.

Q: Simple Government Bonds Question?
The rates on these bonds change continuously throughout the year, and i have no trouble whatsoever in understanding them.

however, i have one question…
Once a government bond is bought, does the rate of return on it change?

For Example:
If i were to buy into a 10-year Treasury Note at 3.027% today, would that 3.027% remain constant for the entire 10 year period? or does the interest rate fluctuate continuously throughout the period in which i own the bond???

thank you, and if i need to re-word this, please let me know.
ok. this is ridiculous. i got two different answers, from 2 people each. doesnt make sense. can one of you please clarify this all and condense it into something i can understand? because it seems as though you all typed skimpy answers and none of them really agree with each other.

A: Jeff is right. 10 Yr T/Note is a fixed income instrument. If you hold it until maturity you know in advance exactly what cash flow you will receive in the future. (Cash flow is semi-annual interest payments plus full principal at maturity).

The yield, or return on the bond is calculated based on the discounted values of those cash flows, as a percentage of the price that you paid when you purchased the bond. So basically the yield doesn’t change, provided that you don’t decide to sell the bond before maturity date.

If you sell early, all bets are off, because you will get a different cash flow than the one that you used to calculate your original yield.

Q: What is the swap rate? Interest rate swaps?
Hi I am reading up about the markets but I really need a simple explaination of what those two terms mean because I cant find a good one.

“The historic relationship between US government bonds and interest rate swaps has broken down this week, for only the second time, as a flood of corporate debt issuance from banks pushed 10-year swap rates below Treasury yields.”

A: Here is a good reference for finance terms and definitions

http://www.investopedia.com/terms/i/interestrateswap.asp

What Does Interest Rate Swap Mean?
An agreement between two parties (known as counterparties) where one stream of future interest payments is exchanged for another based on a specified principal amount. Interest rate swaps often exchange a fixed payment for a floating payment that is linked to an interest rate (most often the LIBOR). A company will typically use interest rate swaps to limit or manage exposure to fluctuations in interest rates, or to obtain a marginally lower interest rate than it would have been able to get without the swap.

Investopedia explains Interest Rate Swap
Interest rate swaps are simply the exchange of one set of cash flows (based on interest rate specifications) for another. Because they trade OTC, they are really just contracts set up between two or more parties, and thus can be customized in any number of ways.

Generally speaking, swaps are sought by firms that desire a type of interest rate structure that another firm can provide less expensively. For example, let’s say Cory’s Tequila Company (CTC) is seeking to loan funds at a fixed interest rate, but Tom’s Sports Inc. (TSI) has access to marginally cheaper fixed-rate funds. Tom’s Sports can issue debt to investors at its low fixed rate and then trade the fixed-rate cash flow obligations to CTC for floating-rate obligations issued by TSI. Even though TSI may have a higher floating rate than CTC, by swapping the interest structures they are best able to obtain, their combined costs are decreased – a benefit that can be shared by both parties.

http://www.investopedia.com/terms/s/swaprate.asp
What Does Swap Rate Mean?
The rate of the fixed portion of a swap as determined by its particular market. This is the rate at which the swap will occur for one of the parties entering into the agreement.

Investopedia explains Swap Rate
These rates are quoted by the market and will be almost identical to the rate used for the swaps, minus any premiums added.

For example: 1) The interest rate associated with the fixed portion of an interest rate swap.

2) The exchange rate associated with the fixed portion of a currency swap.

Q: Need help calculating Rwacc?
(2006-2007 in millions of dollars)
Assets 2006 2007
Cash 1,090 1,234
Cash Equivalents 3,457 4,567
Accounts Receivables 9,345 12,345
Inventories 5,445 11,346
Total Current Assets19,337 29,492
Net Plant Property and Equipment44,678 58,849
Software 4,592 5,515
Other Net Fixed Assets21,938 28,835
Total Assets90,545122,691

Liabilities
Accounts Payable 1,943 1,365
Deferred Income 8,935 3,575
Compensation and Benefits 5,366 4,679
Total Current Liabilities16,244 9,619
Long-term Debt34,921 43,452
Common Stock and Surplus30,000 30,000
Retained Earnings 9,380 39,620
Total Stockholders Equity39,380 69,620
Total Liabilities and Stockholders’ Equity90,545122,691

OTHER FINANCIAL INFORMATION
Shares outstanding:1.25 billion
December 2007 closing price per share:$28
Beta 2.485
Corporate Tax Rate34%

INDUSTRY INFORMATION (ALL DEBT REFERS TO LONG-TERM DEBT: DLT + E = V)
Average Debt-to-Equity ratio for software companies:0.2
Average Equity Beta for software companies1:1.575
Average Debt Beta for software companies:0.3
Average Debt-to-Equity ratio for hardware companies:Unavailable
Average Unlevered Equity for hardware companies:Unavailable

BOND-MARKET INFORMATION AND CREDIT SPREADS
Rates on long-term government bonds (10-year)7.245%
Rates on short-term government notes (1-year)5.355%
Market Risk Premium (RM Rf)6.578%
MBI Debt (Software) Rate Premium above Government1.75%
MBI Debt (Hardware) Rate Premium above Government2.00%

What is Rwacc or need help calculating the Rwacc
I just need help figuring out the debt do i just use the long term debt number?
How would I calculate the Rwacc for the hardware department?

A: I will just give you the principles and let you do the actual calculations: RWACC is the weighted average cost of capital. You should first calculate the cost of equity capital (for the company) using the Capital Asset Pricing Model. Secondly you should calculate the cost of debt capital for the firm.
Then WACC is just just the weighted average cost of capital.
mkt value of equity as percentage of firm value times cost of equity capital plus
mkt value of long-term debt as a percentage of firm value times cost of LT debt capital.
Firm value is mkt value of LT Debt plus mkt value of equity

Yes. I would use LT Debt number.

To calculate the cost of debt, I would start with the cost of LT government debt and add the risk premium. You have to use corresponding data to calculate the WACC for HW companies. For example, you are given the risk premium for hardware company debt.

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