Gilt-edged securities, known as gilts, are fixed-interest securities issued by the British government. They are trusted for their safety, as the risk of default by the government on interest or principal repayments is minimal.
Index-linked gilt refers to a type of government bond issued by the UK in which both the interest payments and the redemption value are adjusted in line with inflation, as measured by the Retail Price Index (RPI).
Redemption refers to the repayment of shares, stocks, debentures, or bonds as specified at the time of issue, often including a fixed redemption date and amount.
A tap stock, also known as a 'tap issue' or 'tap security,' is a gilt-edged security reissued in the market when its price reaches a pre-determined level. There are 'short taps' and 'long taps' depending on their maturity dates.
