Treasury Receipt

AAA

DEFINITION of 'Treasury Receipt'

A zero-coupon bond that doesn't pay interest at regular intervals between the date of issue and maturity, but instead accrues the interest and pays it with the principal at maturity. Treasury receipts are sold by an intermediary, such as a brokerage firm, that issues a receipt to the purchaser representing the underlying treasury securities.

INVESTOPEDIA EXPLAINS 'Treasury Receipt'

Treasury receipts have many different acronyms, including: STRIPS (Separate Trading of Registered Interest and Principal Securities), CATS (Certificates of Accrual on Treasury Securities), TIGRs (Treasury Investment Growth Receipts) and COUGRs (Certificate of Government Receipts). Generally, the receipts were created when a brokerage house would separate the coupon from the principal of a Treasury bond or certain mortgage-backed security bonds, and repackage them so that the principal and coupon were paid at maturity, a process that was permitted by the 1986 Tax Act. Now, the Treasury Department can issue its own zero-coupon bonds, lessening the appeal of the brokerage receipts.

RELATED TERMS
  1. Treasury Lock

    A hedging tool used to manage interest-rate risk by effectively ...
  2. Treasury Note

    A marketable U.S. government debt security with a fixed interest ...
  3. Zero-Coupon Bond

    A debt security that doesn't pay interest (a coupon) but is traded ...
  4. Certificates Of Accrual On Treasury ...

    Issued by the U.S. Treasury and stripped by a financial intermediary, ...
  5. Certificate Of Government Receipts ...

    U.S. Treasury fixed-income securities that are stripped of their ...
  6. Custodian

    A financial institution that holds customers' securities for ...
Related Articles
  1. Bonds & Fixed Income

    Advanced Bond Concepts

  2. Retirement

    Bond Basics Tutorial

  3. Bonds & Fixed Income

    How long can I hold my HH/H Bonds and ...

  4. Bonds & Fixed Income

    What determines the price of a bond ...

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center