Definition
In finance, the practice of separating a bond's principal from its interest payments to create new securities, because Wall Street decided regular bonds weren't complicated enough. It's financial engineering's version of disassembling your IKEA furniture to see if you can make two smaller chairs. Not to be confused with the other kind of stripping, though both involve removing layers and often end with regrettable decisions.
Example Usage
By stripping Treasury bonds into their component parts, the investment bank created a suite of zero-coupon securities for clients with very specific tax strategies.
Source: Financial markets terminology
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See “stripping” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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