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2. This is risky. The repayment source of bonds is the company's operating profit, but there is great uncertainty in the future operation of any company, so corporate bondholders bear the risk of losing interest or even principal.
3. the right to operate. It reflects the creditor's rights relationship, and has no right to operate and manage the company, but it can enjoy the right to claim interest and compensation and the right to give priority to the distribution of remaining assets to shareholders.
4. Higher rate of return
Bond is a kind of valuable securities, and it is a certificate of creditor's rights and debts issued by various economic entities to bond investors in order to raise funds, pay interest regularly at a certain interest rate and repay the principal at maturity.
Characteristics of bonds
_ repayment: that is, the repayment period of bonds must be specified, and the debtor must pay interest to creditors and repay the principal on schedule.
_ profitability: On the one hand, investors can obtain stable interest income on the basis of fixed interest rate, which is generally higher than the bank deposit interest rate; On the other hand, in the securities market, buying at a lower price and selling at a higher price can obtain the spread income.
_ Liquidity: Liquidity means that it can be converted into currency in the market before the repayment period expires to meet investors' demand for currency; Or mortgage to banks and other financial institutions to obtain a corresponding amount of mortgage loans.
_ Security: Compared with other securities, bonds have less investment risk.
Bond type
According to different classification standards, bonds can be classified in different ways:
(1) According to different issuers, bonds can be divided into public bonds, financial bonds and corporate bonds.
(2) According to the length of repayment period, bonds can be divided into short-term bonds, medium-term bonds, long-term bonds and perpetual bonds.
(3) According to the different methods of interest payment, bonds can generally be divided into interest-bearing bonds and discounted bonds.
(4) According to the bond issuance method, that is, whether it is publicly issued or not, it can be divided into public bonds and private placement bond.
(5) According to whether there is mortgage guarantee or not, bonds can be divided into credit bonds, mortgage bonds and guarantee bonds.
corporate bonds
The so-called corporate bonds refer to the creditor's rights and debt certificates issued by joint-stock companies that promise to repay the principal and interest within a certain period of time. Basic characteristics of corporate bonds. In addition to the general nature of bonds, corporate bonds have their own characteristics compared with other bonds such as public bonds and financial bonds:
(1) has higher income.
(2) The risk is relatively high.
(3) Compared with the company's shares, the rights of the holders are different. Corporate bondholders are only creditors of the company, not shareholders, and have no right to participate in the company's business decisions. However, it takes precedence over shareholders in the order of income distribution.
Classification of corporate bonds
(1) According to whether it is registered or not, it can be divided into registered bonds and registered bonds. At present, most bonds issued in China belong to bearer type.
(2) According to the different income of bondholders, it can be divided into participating corporate bonds and non-participating corporate bonds.
(3) According to whether there is mortgage guarantee or not, it is divided into secured corporate bonds and unsecured corporate bonds. Guarantee company bonds are divided into real estate mortgage company bonds, movable property mortgage company bonds and trust mortgage company bonds.
(4) According to different repayment periods, it can be divided into short-term corporate bonds, medium-term corporate bonds and long-term corporate bonds.
(5) According to whether the stock is convertible, it can be divided into convertible bonds and non-convertible bonds.
convertible bonds
Enterprise convertible bonds refer to joint stock limited companies that issue bonds, and the bondholders promise to convert them into shares of the company under certain conditions. Convertible bonds are generally issued in the initial stage of enterprises, which require a lot of medium and long-term development funds, and get less, but it is expected that the future income will be good. The purpose of issuing this kind of bond is to make the public get low interest for a period of time, but once the bond is converted into stock, it can get more abundant income. Driven by this interest, investors will buy bonds enthusiastically, so that enterprises can get the funds they need at less cost. Corporate convertible bonds are a kind of potential stocks. When issuing, it is necessary to specify the conversion time, conversion ratio, whether the conversion is based on face value or market price, etc. To prevent disputes during conversion. Of course, there are still some risks in buying convertible bonds of such enterprises. If the development of the enterprise is not good, then the income after switching to stock trading will be very small.
The difference between bonds and stocks
The nature of (1) is different: a bond is a certificate showing the relationship between creditor's rights and debt, and the bondholder is a creditor of the securities issuer, and has a lending relationship with the issuer. And the stock is the stock certificate, the stock holder is the shareholder of the joint-stock company, and the stock represents the ownership of the company.
(2) Different issuers: The issuers of bonds can be joint-stock companies, non-joint-stock companies, banks and governments. The main body of stock issuance must be joint-stock companies and banks established in the form of joint-stock system.
(3) Different issuance periods: bonds have a fixed term, and the principal and interest are repaid at maturity; The stock is indefinite, and there is no problem of repaying the principal at maturity.
(4) Different ways to recover the principal: bondholders can recover the principal on the agreed date and earn interest; Shares cannot be withdrawn, but the holder can recover the funds by transferring the sold shares.
(5) The stability of the income is different: the bondholders get fixed interest, and the income is relatively stable with less risk. However, when the company obtains huge profits, the interests of creditors cannot be increased accordingly; However, the income of stock holders is not fixed, and the amount of income depends on the company's operating conditions and profits, which is risky.
(6) Different responsibilities and rights: the buyer of bonds has no right to participate in the company's business decision-making and does not bear any responsibility for its operating conditions; Shareholders have the right to participate in the management and decision-making of the company and enjoy the right of supervision, but they must also bear the responsibilities and risks of the company's operation.
(7) Different trading places: most bonds are traded on the OTC market, and most stocks are traded on the stock exchange.
(8) Different ways of paying interest: the distribution of bond interest is cumulative and is a pre-tax expense. Dividends distributed by shares are paid in after-tax profits.
Issue bond
(1) Conditions for issuing bonds: The investment value of bonds is determined by four factors: face value, interest rate, repayment period and issue price, which is also called the conditions for issuing bonds. Face value, interest rate and repayment period are the basic factors of bond issuance. These three factors determine the basic investment value of bonds, so they usually determine the face value, life and interest rate of bonds. However, due to the frequent changes in the market interest rate level, in order to make the decision on the issuance conditions flexible and reserve the issue price, we can make fine adjustments according to the market interest rate level at the time of issuance and determine the issue price of bonds through the market. If the issue price is face value, it is called parity issue; If the issue price is lower than the face value, it is called discount; If the issue price is higher than the face value, it is called premium issue.
(2) Bond issuance methods: Bond issuance methods can be divided into direct issuance and indirect issuance. Direct issuance is the way for the issuer to complete the issuance procedure and raise funds. Indirect issuance refers to the issuer issuing bonds through intermediaries. Most modern bonds are issued indirectly. The issuance methods include group subscription, tender issuance and private placement.