Bond Price Assurance

Finding price information on bonds is often difficult due to the fragmented nature of the fixed income markets and the lack of meaningful trade data.  As a result, market participants rely on imprecise estimates or subjective methods of discovery to determine relative value.   With Bond Price Assurance, First Trust offers a clearly-defined methodology for assisting in price discovery for municipal and corporate bonds.

Bond Price Assurance uses contemporaneous trades as reported to the Municipal Securities Rulemaking Board (MSRB) and Trade Reporting and Compliance Engine (TRACE) to provide factual evidence on which to base pricing.  We believe that actual trades are the most accurate and meaningful source of price information available. 

We then assess the trades by analyzing the underlying characteristics of each bond in order to make comparisons of similar securities.  Our methodology utilizes "bond type" characteristics with which to make our comparisons. 

The ability to define similar securities and evaluate their trade prices allows us to analyze a much greater amount of trade information than by simply looking at trades of a single security.  This additional information provides valuable context to the price discovery process.

In those cases where we cannot find supporting trade information with which to make an accurate assessment we will say so.  Transparency and objectivity are at the heart of our process.