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Ryan Phillips
William and Anita Newman Library
Baruch College of the City University of New York
E-mail: ryan.phillips@baruch.cuny.edu
Scope
This workshop will introduce participants to Fixed Income securities as accessed through Bloomberg Professional service.
It is not meant to be a complete course on fixed income or bonds but rather an introduction to the topic through the
purview of the Bloomberg terminal. Bloomberg II will focus on finding and viewing debt securities by different categories of
issuers, the associated credit risk and through yield analysis for the securities.
The information covered in this workshop follows the layout of the Bloomberg keyboard for asset classes:
• Money-Market [F5]
Subsection of the fixed income market providing short-term debt securities in treasury bills, bonds and notes, certificates
of deposits, commercial paper, banker’s acceptance and repos. These securities are issued for a maturity of less than one
year.
Prerequisites
Prior to attending this workshop, students should have attended the Bloomberg I workshop and/or have previously
acquired basic navigation skills within Bloomberg Professional. Students should have cursory knowledge of Fixed Income
securities.
The Bloomberg Professional service is a source of real-time and historical financial news and information for central
banks, investment institutions, commercial banks, government offices and agencies, law firms, corporations and news
organizations in over 160 countries. The Bloomberg Professional service is an all-inclusive financial information &
workflow product; subsets or customized products are not available.
Courses at Baruch
To learn more about the basics of financial markets, relevant courses at Baruch include:
Contents
1. Logging into Bloomberg
2. Corporate Debt and Related Securities
3. Displaying Yield Curves
4. Security Finder
5. Preferred Stock
6. Municipal Bonds
7. Government Securities
8. Mortgage-Back Securities
9. Money Market
10. New Issues and Fixed Income Monitoring
11. Bloomberg University – Review
By clicking the button below, you agree to the terms and conditions for using the Trading Floor resources as outlined
in the Wasserman Trading Floor / Subotnick Center Usage Agreement. Briefly, this agreement stipulates that:
1) The use of the Center is restricted to educational purposes only. Use of the facilities for commercial or personal
investment purposes, or to support student internships or other employment is strictly forbidden.
2) Trading or auctioning activities of any kind via any medium (internet, telephone, PDA, etc.) within the Center is
strictly forbidden.
3) Cell phone use is forbidden within the Center.
4) Realtime and delayed data may not be captured in bulk or re-transmitted in any way, without exception.
5) Historical data may not be captured or retransmitted in any way. Permissible exceptions are limited to either a) a
specific assignment given by a professor for a Baruch course or b) written permission of the Center Director.
6) Downloading or installing software of any kind, including but not limited to search bars and instant messaging
clients, is strictly forbidden.
7) Tampering with or damaging any hardware or software in any way is strictly forbidden. Failure to adhere to these
terms and conditions will result in removal from the facilities. Please note that we reserve the right to monitor the
activities of users of the Center.
Figure 1. Summary of the Wasserman Trading Floor / Subotnick Center Usage Agreement
You may view the full agreement at the end of this handout. After reading the brief agreement and clicking on the OK
button, type in the username and password as instructed by the instructor. After a few moments, the Windows XP desktop
will appear.
Logging into Bloomberg. Start Bloomberg Professional Service application by double clicking on the
Bloomberg icon on the Windows desktop or by going to the Start -> Programs -> Bloomberg -> Bloomberg.
Once Bloomberg is open, press the red Connect/Default Key in the upper right-hand corner of the keyboard.
Once you’re logged in, four Bloomberg windows, or panels, will open. The four panels support the
Bloomberg user’s workflow, and allow you to multi-task by operating in multiple windows
at once. See Figure 1.
A brief exploration of RELATED SECURITIES [RELS] screen for a diversified corporation like General Electric will provide
examples for most of the categories. For Corporate Debt specifically, the function also provides us an option to view a list
of “Corporates by Ticker GE.”
To view the main menu for Corporate Securities, press the yellow F3 for CORP and then <GO>. Using each yellow F key
with <GO> will bring you to the main menu screen for each applicable asset class. Each asset class menu is similar in
organization and the functions presented.
Evaluating this basic information is a starting point for evaluating the risk of debt issued by General Electric.
Distribution of Company Debt. The DISTRIBUTION OF COMPANY DEBT [DDIS] function will display a company’s total debt
obligation--including bond principal and associated interest, outstanding loans and tranche size—by the year of maturity
(Fig. 4). Users can filter by type of Debt, Coupon, Loan, Sec, and Maturity as well as by the Currency and Country or
Issue.
Note in Figure 5, debt distribution is shown for the GE and all GE subsidiaries. At the bottom of the DISTRIBUTION OF
COMPANY DEBT [DDIS] the corporate structure and hierarchy of GE is listed. Users can also view the debt distribution
according to each individual subsidiary. The terms in figure 4 are defined below.
Loan Type
Term Loan type specifying a certain principle, repayment schedule and floating interest rate. Term loans typically
mature between one to ten years.
Revolver Line of credit to a corporation that does not have a fixed number of payments, typically used to finance day-to-
day operations.
Security Type
144A Private Placement bonds that require the issuer to make limited disclosure to the SEC, according to
Rule 144A
Indexed Linked Interest payments are adjusted according to a price index, often the Consumer Price Index
Structured Notes Structured notes are hybrid securities, fixed-income instruments with derivative components, where
the bond's coupon, average life, or redemption value can be dependent upon the forward movement
of various underlying indices, spot rates, etc.
MTN Medium Term Note, those that mature five to ten years
Coupon Type
Fixed Pays a fixed rate of return over the life of the instrument.
Floating Coupon rate fluctuates according to an underlying benchmark (Maybe the T-Bill or LIBOR rate).
Variable Periodically reset.
Zero No Interest is paid. Face value is the only payment on this bond.
Warrant A derivative security that gives the holder the right to purchase securities (usually equity) from the issuer at a
specific price within a certain time frame.
Step A bond that pays an initial coupon rate for the first period, and then a higher coupon rate for the following
periods
Maturity Type
Bullet One-time lump-sum repayment of an outstanding loan.
Putable A bond that allows the holder to force the issuer to repurchase the security at specified dates before
maturity.
Callable At the callable date, the issuer may "recall" the bonds from its investors. This simply means the issuer
retires (or pays off) the bond by returning the investors' money.
Sinkable A bond issue that is backed by a fund, called a sinking fund, that sets aside money on a regular basis to
ensure investors that principal and interest payments will be made as promised. Sinkable bonds reduce the
Series Type
MTN Medium-Term Note, usually with a maturity date between 5-10 years
EMTN Euro Medium-Term Note, issued outside the United States and Canada with a maturity of less than five years.
144A Refers to a bond that follows the SEC rule modifying a two-year holding period requirement on privately placed
securities to permit qualified institutional buyers to trade these positions among themselves.
Credit Rating & Company Risk. Credit rating agencies are an important fixture in the bond for their opinions of debt
issuers’ relative ability to meet their debt obligations. The ratings themselves are measures of the issuer’s probability of
default as well as the expectations of loss given default.
There are dozens of credit agencies globally that issue credit ratings for issuers of different countries and for specific
industries. Bloomberg provides access corporate credit ratings with the function CREDIT RATING PROFILE [CRPR]. CRPR typically
displays the major international ratings agencies Moody’s and Standard & Poors and Bloomberg’s own Quantitative Issuer
Rating. Bloomberg grants access to other rating agencies such as Fitch and A.M. Best as well through different functions
and on security descriptions.
Ratings are provided at CRPR for debt by maturity and collateralization. Figure 5 displays all the different issuer ratings
addressing the overall credit strength of an issuer, GE, and the credit strength of the company’s debt by maturity, secured
or unsecured, seniority and by geographic scope.
By choosing a rating users will see the history of any changes the agency has made in the past as well as when watches
on the rating. Note figure 6 for Moody’s Senior Unsecured Debt where an initial rating of Aaa was issued in 1982. In
January of 2009, Moody’s alerted the public they had put GE on watch, indicating a future change to the rating may occur.
Changes are color coded. In March of 2012 Moody’s downgraded GE to Aa2. The same procedure and downgrade
occurred in March and April of 2012.
Figure 6. The Credit Rating Profile screenshot for GE <EQUITY> CRPR <GO>
Users can view Company Tree Ratings, ratings for all subsidiaries with the option in the red horizontal bar.
Figure 8. The Company Tree Ratings screen from the Credit Rating Profile, GE <EQUITY> CRPR <GO>
RATD – Rating Scales and Definitions are available via the function RATD. This function provides both basic and
detailed definitions for each rating agency by type of ratings (by issuer, term, grade, etc.).
Investment grade and non-investment grade are noted in the S&P example above. More specific definitions are can be
found at the RATD function. A comparison of the top three agencies’ ratings is given below.
RATC - Company Credit Revisions are available via the function RATC. The default search provides the last 30 days of
credit changes. Bloomberg users can adjust the time range and filter by Credit Revision Rating Type (Short term, Long
term, Outlook etc.), Agency, Current Rating, Last Rating, Country and Industry Type. Under Company Name, users
can limit credit revisions by company titles.
RSKC– The Company Risk dashboard is available via the function RSKC. This function displays several key indicators that
provide investors and debtors with some means to gage the riskiness of a company. Covering a wide range of risk
measures from probability of default to environmental social governance (ESG) to company litigations, these numbers in
isolation may not provide all the information needed to assess the riskiness of a company, but they provide a decent
starting point for delving deeper into company operations and comparing these indicators against peers or industry
groups.
Where the
blue icon is
available,
users are
given the
option to look
at more details
and the
calculations for
the indicators
ESG Disclosure Proprietary Bloomberg Score to gauge a company’s Environmental Social and
corporate governance disclosure.
With regards to the Corporate Governance Scores, keep in mind there are risk metrics beyond those included here, but
these have been chosen by Bloomberg to be included in the RSKC dashboard. The Zicklin School of Business also has
made contributions in this area with the Baruch Index of Corporate Political Disclosure from the Robert Zicklin Center for
Corporate Integrity. http://www.baruch.cuny.edu/baruchindex/
Searching for Corporate Bonds is easy. The command is GE <CORP> <GO>. This retrieves corporate bonds for GE keyed to
the ticker. For GE, there are +5,000 bonds available. In this function the user can view 1-20 and scroll through to see
more.
Asset classes
Fixed Income
Categories
Figure 12. The company bonds list screenshot for GE <CORP> <GO>
If we choose the first bond listed, the user can retrieve a menu screen listing functions to explore more information about
this bond.
The main menu’s categories cover Price Discovery, Analytics, Relative Value, Hedging, Scenarios, Descriptive, etc. Clicking on any of
these categories will return more functions beyond the couple listed on the initial equities screen. Figure10.shows us an
example of this with Description. By clicking Description, the user can view more options under this category as well as more
categories: Security Description, Issuer Description, Rating Functions, Holdings and Research & Filings.
The ticker for a corporate bond includes the company ticker, the coupon rate (rate of return on the debt, the amount paid
at each coupon) and the maturity date: GE 3.1 01/09/23.
In the Description function we have eleven pages of information for this bond from 1) Bond Info to 11) Coupons (Fig 10.).
Security Identifiers. Since the tickers for bonds are sometimes cumbersome to remember and reconstruct, Bloomberg
also provides security identifiers. These numbers are standard identifiers used across different financial information
platforms, the one exception being the BB Number, which is specific to the Bloomberg terminal. These identifiers can be
found in 6) Identifiers.
CUSIP Committee on Uniform Securities Identification Procedures is a 9 alpha-numeric identification number for
the United States and Canada issued by the American Banking Association – The first six digits identify the
issuer and the last three identify the issue
ISIN International Securities Identification Number. The ISIN 12 alpha-numeric character consisting of a two-
letter country code, followed by the nine character national security identifier, and a check digit.
Common Common code is a 9 digit identification number assigned by EUROCLEAR and Cedel
BB Number Bloomberg Identification Number
In the example below, our bond GE 3.1 01/09/23 is plotted against the US Treasury Actives Curve and the USD US Composite AA BVAL
Curve.
Users may also search bonds for multiple companies and by several criteria: Industry, geographic region, credit rating, etc
via the function SRCH. Note the Advanced Search for more search options.
Advanced Search
Figure 17. The company preferred stock screenshot for SRCH <GO>
Although Preferred Stock is technically equity, it does contain some features similar to debt. First, preferred stock pays a
fixed rate of return to holders called a dividend. Second, preferred stock holders have priority over common stockholders
in the case of these dividend payments and in the event of liquidation because of bankruptcy.
To view a company’s preferred stock issues, simply execute the following command: GE <PFD> <GO>.
As you can see from Figure 14, each security is listed with characteristics familiar to what we see with bonds: rate of
return in the form of dividends, maturity, series, currency, redemption type and maturity date.
Figure 19. The company preferred stock screenshot for GE <PFD> <GO>
The Call Schedule follows on page 2. This shows that the stock may be called in full or part any time after 4/24/12, but the
holder must be given 30 days notice.
Figure 20. Preferred security display for GE 6.2 12/31/21 <PFD> DES <GO>
8. Mortgage-Back Securities
Fig 33. The Bloomberg Treasury & Money Markets, BTMM <GO>
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• The Bloomberg Essentials Online Training Platform [BESS <GO>] (Figure 21)
o In addition to the Subotnick Center workshops, Bloomberg offers online self-directed training on the
Bloomberg platform. There are four core courses and upon their completion an exam. Next are market
sector modules, addressing equity, fixed income, forex and commodities, each followed by its own exam.
Upon your successful completion of the exams (75%), you can request an “Acknowledgement of
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terminal; otherwise, the certification will be in the name of the Subotnick Center. Once logged in on the
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o Please see one of the assistants if you have any questions.
• Online Training Videos
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Figure 42. At the login screen, follow the directions to set up your username and password 1) Continue
Conditions and Rules for using the Wasserman Trading Floor / Subotnick Center
Use of the Wasserman Trading Floor / Subotnick Center is subject to the following conditions and rules:
1) You must have a valid Baruch or CUNY ID Card to use the facilities. Keep your ID with you at all times.
2) The use of the Center is restricted to educational purposes only. Use of the facilities for commercial or personal
investment purposes, or to support student internships or other employment is strictly forbidden.
3) Trading or auctioning activities of any kind via any medium (internet, telephone, PDA, etc.) within the Center is
strictly forbidden.
4) Cell phone use is forbidden within the Center.
5) Real-time and delayed data may not be captured or re-transmitted in bulk, without exception.
6) Historical data may not be captured or retransmitted in any way. Permissible exceptions are limited to either
a. A specific assignment given by a professor for a Baruch course or
b. Written permission of the Center Director. Students should be prepared to produce documentation
supporting the above.
7) Downloading or installing software of any kind, including but not limited to search bars and instant messaging
clients, is strictly forbidden.
8) Tampering with, damaging or removing any hardware or software in any way is strictly forbidden.
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areas.
10) Please keep conversations and personal audio devices to a low volume so as not to disturb others.
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inactivity and all working data is erased.
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Failure to adhere to these terms and conditions will result in removal from the facilities.
The Center staff reserves the right to monitor the activities of users of the Center and to verify student ID cards with
the security desk.