[R-SIG-Finance] Valuation of FID

[Christofer Bogaso]

Hi,

I had placed this question in some other forums, however failed to
garner sufficient information till date. Presenting the same here
hoping to get some insightful ideas from experts here.

Typically in a Bond the Principal is constant over it's life. However
I have come across a Bond whose principal is variable, say, average of
S&P quote for the last one month and coupon is paid based on that,
coupon rate being constant. I was looking for some idea how such bond
can be priced?

Any idea will be highly appreciated.

Thanks and regards,