Glossary of Municipal Securities Terms

STRIPS

Acronym for “Separate Trading of Registered Interest and Principal Securities.” STRIPS consist of an ownership interest in a specified principal amount of a Treasury security that has been separated (stripped) at issuance of the right to receive any interest payments thereon, or an ownership interest in a specified amount of any such stripped interest payment coming due on a specific interest payment date. In either case, the owner of the STRIPS will receive a single payment upon “maturation” of the STRIPS. STRIPS have the economic and trading characteristics of a zero coupon bond. See: TREASURY SECURITIES; ZERO COUPON BOND.

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