Systems and methods for issuing and maintaining a bond
View Patent ↗According to some embodiments, a bond is issued to an investor in exchange for value. The bond may be, for example, a tax-free municipal bond associated with (i) a spread to a predetermined index, (ii) a nominal maturity date, (iii) an initial mandatory tender date prior to the nominal maturity date, and/or (iv) an option for the investor to extend the initial mandatory tender date during an initial decision period. According to some embodiments an indication is received, during the initial decision period, indicating that the investor will extend the initial mandatory tender date. It may then be arranged for the initial mandatory tender date to be extended such that the bond will be associated with a subsequent option for the investor to extend an extended tender date during a subsequent decision period.
1. A method, comprising:
issuing a bond to an investor in exchange for value, wherein the bond is associated with (i) a spread to a pre-determined index, (ii) a nominal maturity date, (iii) an initial mandatory tender date prior to the nominal maturity date, and (iv) an option for the investor to extend the initial mandatory tender date during an initial decision period;
receiving, during the initial decision period, an indication that the investor will extend the initial mandatory tender date;
in response to receiving the indication, extending and re-setting the tender date; and
updating option parameters to reflect the extended tender date and decision period.
2. The method of claim 1 , wherein the nominal maturity date is at least ten years, the initial mandatory tender date is substantially thirteen months from the date the bond was issued, a decision period is associated with a period substantially one year before a current tender date, and the extended tender date is substantially thirteen months from the initial decision period.
3. The method of claim 1 , further comprising:
arranging for the investor to receive, prior to the end of the initial decision period, a notification associated with the option to extend the initial mandatory tender date.
4. The method of claim 3 , wherein the notification is associated with at least one of: (i) an electronic notification, (ii) a paper notification, (iii) an oral notification, (iv) a communication network, or (v) a graphical user interface.
5. The method of claim 1 , wherein an issuer of the bond retains the right to increase the spread.
6. The method of claim 1 , further comprising:
receiving, during a decision period, an indication that the investor will not extend the tender date.
7. The method of claim 1 , wherein the pre-determined index is associated with at least one of: (i) the Bond Market Association Municipal Swap Index, (ii) the Standard & Poor's J. J. Kenny Weekly High Grade Index #1, or (iii) any other pre-determined index.
8. The method of claim 1 , wherein said extending is associated with at least one of: (i) a tender agent, (ii) a depository trust company, (iii) the investor, or (iv) an issuer.
9. An apparatus, comprising:
a processor;
a communication device coupled to the processor and adapted to communicate via a communication network; and
a storage device in communication with the processor and storing instructions adapted to be executed by the processor to:
facilitate an issuance of a bond to an investor in exchange for value, wherein the bond is associated with (i) a spread to a pre-determined index, (ii) an initial mandatory tender date, and (iii) an option for the investor to extend the initial mandatory tender date during an initial decision period,
automatically arrange for the investor to receive, via the communication device and prior to an initial decision period, a notification associated with the option to extend the initial mandatory tender date,
receive, during the initial decision period, an indication that the investor will extend the initial mandatory tender date,
in response to receiving the indication, extend and re-set the tender date, and
update option parameters to reflect the extended tender date.
10. The apparatus of claim 9 , wherein the storage device further stores at least one of: (i) an issuer database, (ii) a bond database, or (iii) an investor database.
11. The apparatus of claim 9 , wherein the communication device is adapted to communicate with at least one of: (i) an issuer device, (ii) a tender agent device, (iii) a deposit trust company device, (iv) a facilitator device, (v) an investor device, or (vi) potential investor device.
12. The apparatus of claim 9 , wherein execution of the stored instructions further enable the processor to:
receive the indication via the communication device.
13. A computer-readable medium storing instructions adapted to be executed by a processor to perform a method, said method comprising:
issuing a bond to an investor in exchange for value, wherein the bond is associated with (i) a spread to a pre-determined index, (ii) a nominal maturity date, (iii) an initial mandatory tender date prior to the nominal maturity date, and (iv) an option for the investor to extend the initial mandatory tender date during an initial decision period;
receiving, during the initial decision period, an indication that the investor will extend the initial mandatory tender date;
in response to receiving the indication, extending and re-setting the tender date; and
updating option parameters to reflect the extended tender date and decision period.