• Treasury strips refers to separate trading of the principle (corpus) and the interest coupons. Stripping means buying the bonds and selling the pieces. Reconstituting means buying the pieces and constructing the entire bonds.
• Are Stripped Treasury Obligations. The principal and interest payments are separated from the underlying security. The stripped principal is sometimes called the Corpus. There are many variations on this theme with names striving to set apart different firms offerings in this asset group. The stripped offerings are essentially Zero Coupon Bonds.
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Zero coupon bond
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| ||Cats: Are Certificates of Accrual on Treasury Securities. In a generic sense, the sliced off interest payments or coupons are called Strips or zeroes. At those times the discounted bond principal is referred to as the Corpus.|
| ||Corpus: Refers to the final or underlying principal amount which has been stripped, discounted and sold as a zero coupon bond. This compares to the interest only pieces which are often called Strips. Some people also count the discounted principal portions as strips. It is from the Latin which means body.|