5.11.4.7. Rules for Delivery of Bonds
The delivery of a bond (or a certificate of deposit for bonds) must be in denominations of $100 or $1,000. Registered bonds may not be delivered in denominations of over $100,000; however, the same rule does not apply to coupon bonds. Municipal bonds must be delivered in denominations of $1,000 or $5,000. If the trade is for an amount not divisible by 100 for registered or coupon bonds, the parties must agree upon the proper units of delivery.
Most bonds trade “and interest,” which means that the price includes any interest that has accrued on the bond from the time that interest was last paid until the day before the settlement date.
Typically bonds pay interest every six months according to the following schedule:
• January and July (J&J bonds)
• February and August (F&A bonds)
• March an