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That's all new debt. The old debt would be paid at the old rates
by williadc 4y ago
That's all new debt. The old debt would be paid at the old rates
- 300bps 4y agoThat’s not how bonds work. Bonds have an analytic property called duration. Most people interpret that to mean the amount of time until the bond matures. The true definition of duration though is a bond’s interest rate risk. “Old debt” interest rate can go up because of: 1. A bond matures and must be refinanced at current market rates 2. A bond has a variable interest rate and simply goes up at the next reset period A higher average interest rate on the “old debt” will be coming across the treasury curve, it’s simply a matter of time.