Bond is a kind of valuable securities, which is a bond debt certificate issued by various economic entities to bond investors to raise funds, and promises to pay interest regularly and repay the principal at a certain interest rate. Because the interest of bonds is usually predetermined, bonds are also called fixed-interest securities. Bonds usually include the following basic elements: 1. Par value; 2. price; 3. Repayment period.
Characteristics of bonds:
As a bond debt certificate, bond, like other securities, is also a kind of virtual capital, not real capital. It is a certificate of real capital actually used in economic operation. From the perspective of investors, bonds have the following four characteristics: 1. Repayment; 2. Liquidity; 3. Safety; 4. Profitability.
Bond type:
Bonds can be classified from different angles. With the diversification of people's demand for financing funds, various new forms of bonds will appear. At present, there are generally the following kinds of bonds.
1. According to the issuer, there are:
1. government bonds;
2. Financial bonds;
3. Corporate bonds;
4. International bonds.
II. According to the repayment period, there are:
1. Short-term bonds;
2. Medium-term bonds;
3. Long-term bonds;
4. perpetual bonds.
Three, according to the classification of interest payment methods are:
1. Interest-bearing bonds;
2. Discounted bonds, also known as discounted bonds.
Four, according to the bond interest rate floating or not:
1. Fixed rate bonds;
2. Floating rate notes.
Five, according to the registration classification are:
1. Registered bonds;
2. Bearer securities.
Six, according to whether there is a mortgage guarantee classification are:
1. credit bonds, also known as unsecured bonds;
2. Guaranteed bonds.
Seven, according to the bond principal repayment methods are classified as follows:
1. bonds due for repayment;
2. Interim repayment of bonds;
3. Deferred repayment of bonds.
Bonds are debt certificates with interest. The issuer promises to repay the specified amount of principal at a certain date in the future (usually several years after issuing bonds), and at the same time pay a certain amount of interest regularly.
Bonds are issued by the state, financial institutions, international organizations and industrial and commercial enterprises according to certain procedures. They raise funds directly from the society by issuing bonds. Bonds are like IOUs in a lending relationship, but this lending relationship is securitized. Bonds can be transferred halfway, while IOUs are generally not transferable.
Bond type
There are many kinds of bonds, which can be divided according to different standards. The following are some common bond types.
Floating rate notes: Unlike fixed-rate bonds, the interest rate in floating rate notes is calculated on the basis of other interest rates according to the formula. Floating rate notes in the international financial market generally fluctuates according to the London Interbank Offered Rate (LIBOR) of three or six months plus a certain spread, and changes with the change of market interest rate.
Asset-backed bond: a bond guaranteed by an asset or portfolio designated by the bond issuer, which can be anything from accounts receivable to collateral.
Mortgage bond: a bond secured by a series of collateral.
Subordinated bond: refers to the bond whose repayment order is lower than that of other higher-grade bonds, and the interest rate of such bonds is usually higher than that of senior bonds.
Convertible bonds: allow investors to convert bonds into other securities of the issuing company under certain conditions, usually common shares or preferred shares. Convertible bonds combine the characteristics of debt and equity, so they are called "hybrid securities".
Zero coupon bond's definition: buying and selling corporate or municipal bonds at a price significantly lower than the face value. The discount is large because bonds have no interest. When bonds are redeemed at face value at maturity, investors can realize profits. This bond can be at discount, or the bank can remove the coupon and package it into a zero coupon bond. The Eurodollar bond market was issued in June 1982 and June 1, and the issue price was much lower than the face value, but there was no interest. Investors hold such bonds mainly based on their capital appreciation, that is, the redemption face value is higher than the purchase discount price; The issuer can avoid the problem of capital turnover caused by the need to pay interest regularly.
Redeemable bonds in advance: before the maturity date, part or all of the principal of bonds can be repaid in advance according to the conditions stipulated at the time of issuance.
Corporate bonds are debt contracts issued by joint-stock companies. The company promises to repay the principal and pay interest at a pre-agreed interest rate on a specific date in the future.
Corporate bonds mainly include the following categories:
(1) can be divided into: 1 according to whether it is registered or not. Registered bonds are corporate bonds in which the name of the holder is registered on the front of the bond, the principal and interest are withdrawn with the seal, and the transfer must be endorsed and registered with the bond issuing company. 2 bearer bonds, that is, there is no need to indicate the name of the holder on the face of the bond, and the principal and interest repayment and circulation transfer are only based on unregistered bonds.
(2) According to whether the holder participates in the profit distribution of the company, it can be divided into: 1. Participating corporate bonds refer to corporate bonds that can participate in the company's profit distribution to a certain extent in addition to obtaining pre-agreed interest income. 2. Non-participatory corporate bonds refer to corporate bonds whose holders can only get interest at the pre-agreed interest rate.
(3) Divided into: 1 according to whether it can be redeemed in advance. Corporate bonds can be redeemed in advance, that is, the issuer can buy back all or part of the bonds it issued before the maturity of the bonds. 2. Corporate bonds cannot be redeemed in advance, that is, corporate bonds that can only repay the principal and interest in turn.
(4) According to the purpose of issuing bonds, it can be divided into: 1. Ordinary corporate bonds, that is, corporate bonds characterized by fixed interest rate and fixed term. This is the main form of corporate bonds, which aims to provide a source of funds for the company to expand its production scale. 2. Restructured corporate bonds are bonds issued to clear corporate debts, also known as old bonds for new bonds. 3. Interest-bearing corporate bonds, also known as adjusted corporate bonds, refer to new bonds with lower interest rates issued by companies facing debt credit crisis with the consent of creditors in exchange for previously issued bonds with higher interest rates. 4. Deferred corporate bonds refer to corporate bonds that the company can extend the repayment period after obtaining the consent of creditors when the issued bonds cannot be paid at maturity and new debts cannot be issued to repay the old debts.
(5) It is divided into: 1 according to whether the issuer gives the holder options. Corporate bonds with options mean that in the issuance of some corporate bonds, the issuer gives the holders certain options, such as convertible corporate bonds (with options to convert them into common shares), corporate bonds with warrants and repayable corporate bonds (with options that the holders can sell back to the issuer before maturity). 2. Corporate bonds without options. That is, the bond issuer does not give the holder the above option.
References:
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Corporate bonds are debt contracts issued by joint-stock companies. The company promises to repay the principal and pay interest at a pre-agreed interest rate on a specific date in the future.
Corporate bonds mainly include the following categories:
(1) can be divided into: 1 according to whether it is registered or not. Registered bonds are corporate bonds in which the name of the holder is registered on the front of the bond, the principal and interest are withdrawn with the seal, and the transfer must be endorsed and registered with the bond issuing company. 2 bearer bonds, that is, there is no need to indicate the name of the holder on the face of the bond, and the principal and interest repayment and circulation transfer are only based on unregistered bonds.
(2) According to whether the holder participates in the profit distribution of the company, it can be divided into: 1. Participating corporate bonds refer to corporate bonds that can participate in the company's profit distribution to a certain extent in addition to obtaining pre-agreed interest income. 2. Non-participatory corporate bonds refer to corporate bonds whose holders can only get interest at the pre-agreed interest rate.
(3) Divided into: 1 according to whether it can be redeemed in advance. Corporate bonds can be redeemed in advance, that is, the issuer can buy back all or part of the bonds it issued before the maturity of the bonds. 2. Corporate bonds cannot be redeemed in advance, that is, corporate bonds that can only repay the principal and interest in turn.
(4) According to the purpose of issuing bonds, it can be divided into: 1. Ordinary corporate bonds, that is, corporate bonds characterized by fixed interest rate and fixed term. This is the main form of corporate bonds, which aims to provide a source of funds for the company to expand its production scale. 2. Restructured corporate bonds are bonds issued to clear corporate debts, also known as old bonds for new bonds. 3. Interest-bearing corporate bonds, also known as adjusted corporate bonds, refer to new bonds with lower interest rates issued by companies facing debt credit crisis with the consent of creditors in exchange for previously issued bonds with higher interest rates. 4. Deferred corporate bonds refer to corporate bonds that the company can extend the repayment period after obtaining the consent of creditors when the issued bonds cannot be paid at maturity and new debts cannot be issued to repay the old debts.
(5) It is divided into: 1 according to whether the issuer gives the holder options. Corporate bonds with options mean that in the issuance of some corporate bonds, the issuer gives the holders certain options, such as convertible corporate bonds (with options to convert them into common shares), corporate bonds with warrants and repayable corporate bonds (with options that the holders can sell back to the issuer before maturity). 2. Corporate bonds without options. That is, the bond issuer does not give the holder the above option.