Yield to put %

Yield to put % is the expected annual return, including coupon payments, if an investor holds a bond until the next put date and exercises the put option. It is calculated based on the bond's purchase price, assuming redemption occurs on the next put date.

The formula is:

Yield to put = (Current coupon % / Close % * 100) + (((Face value * Put next price / 100) - Close) / Close) / Years to put * 100

Key terms:

• Current coupon: The interest rate the bond pays relative to its face value.
• Face value: The amount the issuer promises to pay the bondholder at maturity.
• Put next price: The price at which the bondholder can sell the bond back to the issuer on the next put date.
• Years to put: The time remaining until the bond's next put date, expressed in years.