Semi-annual basis

The gilts market is primarily a plain vanilla market, and the majority of gilt issues are conventional fixed interest bonds. Conventional gilts have a fixed coupon and maturity date. By volume they made up 82% of the market in June 2002. Coupon is paid on a semi-annual basis. The coupon rate is set in line with market interest rates at the time of issue, so the range of coupons in existence reflects the fluctuations in market interest rates. Unlike many government and corporate bond markets, gilts can be traded in the smallest unit of currency and sometimes nominal amounts change hands in amounts quoted down to one penny ( 0.01) nominal size. 

The records accumulated in meeting these regulatory requirements must be retained for at least five years. However, it would be desirable to maintain them for a longer period in order to substantiate compliance should this be questioned. Records of the initial performance tests, later performance tests and inspection reports must be submitted to the regulatory agency responsible for their facility. If anything exceeds permissible limits, these data must be submitted on a semi-annual basis. The latter reports should also include information on efforts made to return the operations to acceptable levels. 

Craisider a hypothetical situation. Assume that an option-free bond paying a semi-annual coupon 5.5% on par value, with a maturity of 5 years and discount rate of 8.04% (EUR 5-year swap rate of 1.04% plus credit spread of 700 basis points). Therefore, the valuation of a conventional bond is performed as follows (Figure 9.4). 

Arid and semi-arid regions are distinguished on the basis of their annual precipitation sums and include ... 

---