Linear bond (OLO) - Financial definition
Financial acronyms
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Concise definition of the term linear bond
Name designing medium, long and very long term Belgian government bonds. French name: obligation linéaire
Comprehensive definition of the term linear bond
These euro-denominated bonds hold the name linear bonds because of their mode of issuance. In fact, they can be issued
by successive, fungible «lines« (tranches) of which each increases the outstanding amount
of the existing issue.
OLOs are issued in different ways:
- by auctions based on the prices offered by the bidders;
- by syndication (e.g.: when issuing the first tranche of a new line).
Almost all OLOs are fixed coupon bonds with a yearly coupon, except one line which is an
FRN indexed on the 3 month EURIBOR.