What are the advantages and disadvantages of perpetual bonds?

Perpetual bonds's official definition refers to bonds with no definite maturity date or long term. Investors can get interest regularly, but they can't get the principal at a certain time. The issuer not only has no fixed repayment period, but also can choose to postpone the current interest payment to the next interest payment date. So, what are the advantages and disadvantages of perpetual debt? Advantages and disadvantages of perpetual bonds are as follows: 1 Advantages: The issuers are mainly state-owned enterprises, which can reduce the leverage ratio of state-owned enterprises with high debt ratio to a certain extent, and enterprises do not have to worry that the holders of perpetual bonds will participate in the company's operation and their shares will be diluted. The coupon rate of perpetual bonds is generally higher than that of ordinary bonds. The lower the jumping base point, the higher the coupon rate will be. 2 Disadvantages of Perpetual Debt The issuer of Perpetual Debt can postpone the interest payment, and is not limited by the number of times, and will not be liable for breach of contract. In other words, the issuer can choose to postpone the current interest payment to the next interest payment date. However, deferred interest payment must meet certain conditions and have corresponding punitive clauses. In addition, perpetual bonds have poor liquidity and weak liquidity, which is also one of the shortcomings of perpetual bonds. The above is all about the pros and cons of perpetual debt in this paper, as well as the specific pros and cons analysis, hoping to help everyone. In addition, perpetual bonds are an excellent investment choice for many investment institutions because of their low risks and high returns, and can be purchased through bank outlets. More details are subject to official news. If you want to know more information, you can also follow us.