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FIXED INCOME

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Frequently Asked Questions (FAQ)

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FIXED INCOME

Why would someone buy a bond at a premium?

Investors pay a premium, or more than face value, in exchange for receiving higher interest payments over the life of a bond. Although the investor will ultimately receive less than their initial investment at redemption, the premium bond’s above-market coupon allows it to earn a higher overall yield than on a comparable discount or par value bond.

Download the brochure below to learn more about premium bonds.

I have a large prospect I need to create a bond ladder for. Can you help me?

Yes! Your AAM Advisory Consultant can assist you with creating a custom bond portfolio in a private-labeled report. Contact your AAM Advisory Consultant to learn more at (888) 969-2663 or email CapitalMarkets@aamlive.com.

Below are additional resources for you to learn more about AAM’s portfolio support services.

I don’t have a fixed income contact at AAM. How do I get one?

For more than 40 years, AAM has been a trusted capital markets resource for financial professionals. If you do not have an AAM Advisory Consultant, CLICK HERE to find your AAM contact, you can call (888) 969-2663 or email CapitalMarkets@aamlive.com.

STRUCTURED PRODUCTS

When creating a structured product, is the issuer taking a bet that the trade will not work so they can get cheap funding?

No. Issuers do not take “the other side” of a structured product for the benefit of achieving a cheaper source of funding, or lower borrowing costs.

On the brokerage statement, why is the initial value of the Structured Note purchased less than what was deposited?

This is to be expected. The value reported on the initial brokerage statement will most likely be lower than the initial principal amount. This can be attributed to varying factors, such as upfront fees or time to maturity.

The value reported on a brokerage statement is an estimate of the current market value, or bid, an investor may receive if they sold the Structured Note prior to maturity. The statement value does not reflect the terms or payout profile of the Note.

Here are some AAM resources you may find useful for a better understanding of structured product statement pricing.

I see that AAM offers Buffered Notes, but I don’t see any available when I log onto the AAM website. How can I access a full list of Structured Product offerings?

AAM’s Structured Product offerings, including Buffered Notes, are posted at the beginning of each month, with the IOI period generally ending near the end of the month. It’s important to remember that the Structured Product calendar may change month-to-month based on current market conditions.

AAM works closely with your broker-dealer and will only show Structured Products that your firm has approved. You can contact your AAM Advisory Consultant to learn more about your firm’s approvals at (888) 969-2663 or email CapitalMarkets@aamlive.com. You can also reach out to your home office to request additional product approvals.

Can I create a customized structured product?

Yes! AAM can help advisors create custom Structured Products tailored to meet specific market views and investment objectives, with attractive terms and pricing. Custom deals can be created as low as $500,000. To learn more, contact your AAM Structured Product Specialist at (888) 969-2663 or email CapitalMarkets@aamlive.com. You can also reach out to our Structured Product Trading Desk at AAM_SPTrading@aamlive.com.

GENERAL

Can I trade with AAM using my existing client accounts or do I have to transfer assets and/or open accounts with AAM?

AAM has strong, long-standing relationships with all major clearing firms and custodians and can trade directly in your existing client accounts, in most cases.

Can I open an account to buy and sell securities with AAM if I am not a licensed financial professional?

No. AAM works exclusively with licensed financial professionals. Retail investors can only access AAM’s product and service offerings through their financial professional.

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