What is the symmetry between ordinary corporate bonds and "participating corporate bonds"

Overview of ordinary corporate bonds Ordinary corporate bonds are the symmetry of "participatory corporate bonds", which means that the demander (issuing company) issues debt certificates to the fund provider and agrees on the way to calculate the coupon interest and repay the principal. This debt certificate represents the debt of the corporate bonds of the issuing company. During the existence of corporate bonds, regardless of the profit, a certain amount or proportion of interest should be paid on time according to the issuance conditions, and the principal should be repaid according to the contract. At present, all companies can issue ordinary corporate bonds, but corporate bonds issued by companies that are not publicly issued are limited to private placement.

Is the classification of ordinary corporate bonds guaranteed?

Unsecured and secured, in which secured can be divided into financial institution guarantee (bank guarantee) and asset guarantee (securities, movable property or immovable property provided by the issuing company to the entrusted bank).

Coupon rate decided.

The design of coupon rate is very flexible, and it is generally issued at a fixed interest rate and a floating interest rate. The fixed interest rate means that the coupon rate of corporate bonds is fixed at a certain level during the duration of corporate bonds, while the floating interest rate is determined by pre-selecting the coupon rate interest rate and the range of increase and decrease. During the duration of ordinary corporate bonds, the coupon rate of the current period is periodically re-determined according to the level of the pricing index at that time.

We can use the following general formula to express the coupon rate design of bonds: c = a * INDEX+b, where c stands for coupon rate of bonds, INDEX is the market reference interest rate, coefficient A is called leverage, and coefficient B is the overweight part of interest rate, which can usually be used to reflect the credit risk of the issuing company.

(1)a=0) A = 0 is a fixed bond, that is, a fixed interest rate bond with coupon rate equal to b%.

(2)a & gt； 0 is a traditional floating bond, that is, the coupon rate of the bond is consistent with the change direction of the index interest rate. The bond interest rate of floating rate bills will increase with the increase of market interest rate, and because the increase of market interest rate will reduce the price of general bonds, many market participants also call floating rate bills bearish bonds.

(3)a 1, which we call ultra-floating interest rate notes. This coupon rate design increases the influence of index interest rate changes, highlights the risk-return characteristics of bonds, and makes bonds that were originally regarded as low-risk and low-return become high-risk financial instruments. For example, if the coupon rate of a bond is set to 3BA-50bp, the coupon rate of the bond will rise or fall by three percentage points for every increase or decrease of the BA interest rate.

If leverage coefficient a is a credit rating

Issue period length

Different ways of repaying principal and interest

The size of the number of issues and the supply and demand structure of the market.

Remember to be anonymous

Registered and bearer bonds At present, ordinary corporate bonds are mostly bearer bonds, but investors may also require registration.

Ordinary corporate bond investment risk interest rate risk: When the market interest rate goes up, the bond price goes down.

Risk of loss and damage: bearer securities cannot report the loss.

Inflation risk: When the inflation rate is expected to rise, the actual return of bond investors will be eroded.

Reinvestment risk: When bonds pay interest, the coupon interest collected may no longer be regarded as the risk of coupon rate's original investment.

Liquidity risk: When holding bonds needs to be realized, losses may occur due to uncertain market demand.

Credit risk: the risk that the issuer may not be able to continue to perform its debt repayment obligations.

Risk of prepayment: If the bond gives the issuing company the right to repurchase, investors will face the risk that the issuing company will exercise the right to repurchase and prepay when the interest rate drops.

Subscription in the primary market of ordinary corporate bond trading: the issuing company adopts self-financing, and investors directly subscribe for the issuing company; If it is entrusted to an underwriter, the underwriter will contact a specific person to subscribe.

Secondary market transactions:

Buy-and-sell transaction: refers to over-the-counter transaction, buyout or sale negotiated by brokers.

Attached repurchase/resale transaction: a transaction in which a securities company sells (buys) corporate bonds and agrees with customers to repurchase (sell) corporate bonds at an agreed interest rate after a certain period of time.

Corporate bonds and corporate bonds Corporate bonds: Corporate bonds refer to bonds issued by enterprises engaged in economic activities such as production, trade and transportation.

Corporate bonds:

In western countries, because only joint-stock companies can issue corporate bonds, corporate bonds are corporate bonds in western countries. In China, corporate bonds generally refer to bonds issued by enterprises of various ownership systems. At present, China's corporate bonds mainly include local corporate bonds, key corporate bonds, corporate bonds with interest coupons, corporate bonds with certificates of deposit, corporate bonds with product quotas and corporate short-term financing bonds.