Bloomberg bond pricing sources

chokingvictim · Post by **chokingvictim** » Wed Jan 30, 2008 9:35 pm

Could anyone explain why prices for bonds on Bloomberg vary so widely between Bloomberg Fair Value source and every other source? Why would 8 other sources value a bond on 12/31 around 99.8 and BFV show 88? What am I missing here? Sorry if this is an incredibly dumb question, but I'm trying to price out a junk bond portfolio and I'm having trouble figuring out where my client is getting their numbers. I'm a Bloomberg newb so any guidance for the dumb newb is appreciated. ${L_SMILIES_SMILE}$

Struct.Cred · Post by **Struct.Cred** » Wed Jan 30, 2008 10:03 pm

If I recall BBFV prices bonds off of a curve. If a bond is mapped to a dodgy curve, the FV price could be miles away from the market. For all you know a FV price may be derived from a curve built from bonds that haven't been marked since middle ages.

chokingvictim · Post by **chokingvictim** » Thu Jan 31, 2008 12:01 am

^^ Thanks a lot. I never would have guessed that was why the prices were so far off.