Targeted Accrual Redemption Note - TARN

Targeted Accrual Redemption Note - TARN
An investment vehicle, calculated based on a variation of the LIBOR formula, which provides a guaranteed sum of coupons. Once the coupons you've recieved reaches the target cap, the note will be redeemed and you will be paid the par value of the note. Targeted Accrual Redemption Notes (TARN) typically have coupon payments that are based on an inverse floating LIBOR calculation. Thus, they may have good performance in the short-term if interest rates decrease, but may also underperform if interest rates rise.

One of the more distinguishing features of a TARN is the possibility of an early termination. It is based on a predetermined accumulation of the coupons. Once that sum is reached, the investor receives the final payment of par and the contract ends.


Investment dictionary. . 2012.

Игры ⚽ Нужен реферат?

Look at other dictionaries:

  • TARN —   Sigla di Targeted Accrual Redemption Note. Rappresenta una particolare emissione di bond ( obbligazioni ), il cui rendimento e stacco cedola avviene solo se un sottostante tasso di riferimento raggiunge e/o si mantiene a quanto prefissato nelle …   Glossario di economia e finanza

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”