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Yankee market

The U.S. foreign market. The market in the U.S. for securities that non U.S . companies and governments issue. Example: Some shares of Nomura Securities trade in New York in the Yankee market.


Definition: One billion units of a currency.

Usage: “I’ve got a customer who wants to buy a yard of Mexican pesos. Price, please.” The customer wants to buy a billion pesos.


Yield Enhanced Equity Linked Debt Securities (sm). Lehman Brothers’ proprietary synthetic Equity Linked Debt Security (q.v.). Lehman issues the security, which pays a high coupon until maturity, then pays the value of the underlying common stock (not Lehman’s) – up to a cap, such as 150% of the issue price.

Yield Burning

Definition: The IRS’s name for the dealer’s crime of overcharging state and local governments and authorities for Treasury securities that they use in “advanced refunding” of old, high-yielding municipal bond issues with new, low-yielding ones.

Application: After interest rates decline, the tax-exempt entities issue new bonds with low coupons and use the proceeds to buy just enough Treasury bonds to cover the higher coupons on the old bonds. If the entity is able to use less than the full proceeds of the new bond issue to buy the Treasuries, thus, turning a profit, the IRS taxes this profit. If the bond dealer marks up the Treasuries above market to reduce the profit, this reduces the IRS take. “Michael Lissack, a former managing director of Smith Barney who identified the arcane and complex practice [of yield burning], originally filed the suit [against various bond dealers].

Example: “For example, the lawsuit alleges that Alex. Brown secretly charged the state of Pennsylvania a markup of 4.5 basis points instead of 0.45 basis points in a $494 million bond offering in March 1994. The federal government was defrauded, according to the I.R.S., because it could have collected taxes on the profits if the lower amount was charged.”

Seea also finanacial dictionary

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