Bond prices by CUSIP which stands for Committee on Uniform Securities Identification Procedures refers to the CUSIP identifier which consists of nine characters. There is a separate number for each bond and stock that is registered in the USA. This comprises of the bonds on the Muni bond market and the bonds that are offered by the government. The prices of the bonds can be located with the help of CUSIP identifier. The new issues that need to be registered are assigned a CUSIP.
All bonds that are issued by the state are given a CUSIP number. Every bond that is issued has a unique identifying number. Each of these numbers has a special purpose. The first six numbers in the CUSIP identifier are used to identify the bond issuer and it is provided to the issuer in the alphabetical sequence. Sometimes there is a need to add the 7th character if it is difficult to identify the different issues of the entity with 6 characters.
The CUSIP system takes into account that there are new issuers every year therefore the system consists of placed gaps which that allows for more addition. The first 6 characters of the CUSIP are referred as the base characters. The next two characters are referred as the issue number. They are numeric when they are applied to the stocks.
The final digit in the CUSIP is called as the check digit. It is derived by the Modulus 10 double add technique which is a mathematical technique. It is possible to find the market value of bonds by knowing the CUSIP number of the bond. The financial Industry Regulatory Authority website contains of the collective bond information from the broker dealers and market prices as the bond’s par value. Let us see how we can get the bond’s market value:
- You can open the FINRA website and click on the market data section to visit the bond page.
- Then you can click on the Advanced Bond search option that is provided on the right side.
- To select the bond type you have to click on one button out of the three buttons. You can choose from the three bonds given namely Corporate or municipal bonds, Agency bonds and US Treasury bond.
- You have to select the drop down arrow which is provided on the “search by” box and then click on “CUSIP”
- You can then type the nine character CUSIP number of the bond that is a combination of numbers and letters. To view the information of the bond you have to click on the “Show Results” box which is provided on top of the page.
- Once you find the bond price you can divide it by 100. For instance if the price of the bond is 118.385 meaning that the bond trades for 118.385 percent of its par value. By dividing this by 100 we get 1.18385
Multiply this result by the bond’s par value in order to obtain its market value
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