EasyGrowth Treasury Receipts

EasyGrowth Treasury Receipts (ETRs or 'eaters') are fixed income securities issued by Dean Witter Reynolds (later Morgan Stanley) in the 1980s. ETRs are zero-coupon bonds because they trade at a discount to par value(which is usually $1,000) and they mature at par and throughout their life they pay no interest(interest accrues as principal). For example if you purchased ETRs today that mature in 10 years you might pay $600 for one bond that will be valued at $1,000 (par) in 10 years. ETRs are also categorized as treasury receipts because the underlying securities are US Treasury Bonds therefore all payments are backed by U.S. Treasury securities. The most liquid zero-coupon bonds in the United States are called STRIPS, these are created by taking apart (or stripping) the coupons off of US Treasury Bonds. ETRs are no longer created because STRIPS are now the product of choice in this category due to their excellent liquidity and because they can be created (stripped) by any financial institution. Other treasury receipts were also created in the United States by other firms such as TBRs (E.F. Hutton), TIGRs (Merrill Lynch), CATS (Salomon Brothers) and COUGRs (A. G. Becker). Most treasury receipts were nicknamed after animals such as 'teddy bears' (TBRs), 'tigers' (TIGRs), 'cats' (CATS) and 'cougars' (COUGRs) but ETRs were named after a common fictitious character of the 1980s, E.T. from the hit movie.