Selling back, the investor sells back the bonds to the issuer during the selling back period, and the general selling back price is the face value;
Price adjustment, the issuer has the right to adjust the coupon rate K years after the bond exercise date, which can be raised or lowered;
Redemption, the issuer has the right to choose to redeem the bonds in advance on the exercise date, and the general redemption price is the face value;
Repay in advance, from a certain year of existence to the maturity of the final bond, the issuer will repay in equal amount every year;
Extension, the bond lasts for a long time before the issuer redeems, and expires when the issuer redeems.
Bonds are securities issued by debtors such as governments, enterprises and banks in accordance with legal procedures in order to raise funds and promise creditors to repay the principal and interest on a specified date.
Bond/debenture is a kind of financial contract, which is a debt certificate issued to investors when the government, financial institutions and industrial and commercial enterprises directly borrow money from the society and promise to pay interest at a certain interest rate and repay the principal according to the agreed terms. The essence of a bond is a certificate of debt, which has legal effect. There is a creditor-debtor relationship between bond buyers or investors and issuers. Bond issuers are debtors and investors (bond buyers) are creditors.
Bond is a valuable security. Because the interest of bonds is usually determined in advance, bonds are a kind of fixed-interest securities. In countries and regions with developed financial markets, bonds can be listed and circulated.
Bonds have the following three meanings:
Issuers of bonds (government, financial institutions, enterprises and other institutions) are borrowers of funds.
Investors who buy bonds are lenders of funds.
The issuer (borrower) needs to repay the principal and interest within a certain period of time.
As the evidence of creditor's rights and debts, bonds, like other securities, are also a kind of virtual capital, not real capital. It is a certificate of real capital actually used in economic operation.
As an important means of financing and financial instruments, bonds have the following characteristics:
Repayment means that the bond has a prescribed repayment period, and the debtor must pay interest and repay the principal to the creditor on schedule.
Liquidity means that bondholders can flexibly transfer bonds according to their own needs and actual market conditions, so as to recover the principal in advance and realize the investment income.
Security means that the interests of bondholders are relatively stable and do not change with the changes of the issuer's operating income, and the principal can be recovered on schedule.
Profitability means that bonds can bring certain benefits to investors, that is, the return on bond investment. In actual economic activities, bond income can be expressed in three forms:
First, investment bonds can bring interest income to investors regularly or irregularly;
Second, investors can use the changes in bond prices to buy and sell bonds to earn the difference;
The third is the cash flow of investment bonds and the interest income of reinvestment.