Dollar Bond Index-Linked Securities - Dollar BILS

Dollar Bond Index-Linked Securities, a.k.a. Dollar BILS, aren't anything like dollar bills. Dollar BILS are a zero-coupon debt instrument, which means the investor in the Dollar BILS isn't earning interest on it.

Like all zero-coupon bonds, the rewards of investing in Dollar BILS are reaped at maturity. When Dollar BILS mature, the payout matches the performance of a predetermined index over a predetermined time period.

Dollar BILS are great for companies that don't want to just sit on their cash, but also want their cash by a certain date (say, to pay off some debt, or other bills). It's not all roses and rainbows though...Dollar BILS are considered riskier than your plain ol' zero-coupon bonds, since they follow an index, rather than being guaranteed certain returns.