02 Debt - Corp Bonds Flashcards
Secured
Unsecured
Identified collateral to back
No collateral - backed by co. credit
Mortgage
backed by mortgage
Collateral Trust
collateral is securities of other co. issuer ownes
Equipment Trust
- equipment collateral
- matures before equip goes out, issued at less than full value of equip
- issued serially with depreciation
Guarenteed
backed by other co. than issuer - parent
Liquidation Order
1 - 7
- wages
- tax
- secured debt/ bonds, mortgage
- unsecured debt & creditors
- subordinated debt
- preferred stock
- common stock
Income bonds / Adj bonds
adjustment bonds
pays int only if enough income
BOD declares
No missed accumulation
Zeroes
- price
- mkt stability
- tax
- price
- no interest, sold @ dis, matures @ par
- votatile
- at maturity, income tax on accredited regardless of mkt price
- quote based on YTM
Trust Indenture
between who
for who
Issue amoutn
covant between issuer & trustee
FBO bond holder
Issues of 5 MM+ interstate
Mortgage Bond Corp
3 duties
maintain prop
insure prop
pay prop taxes
Corp / Commercial Paper
Promissory Notes
definition & price
corps trade with each other - no bank
lower interest than bank
sold at discount
Corporate / Commercial Paper
Promissory Notes
- secured
- time
- registration
corp lending to each other
unsecured, co. has good credit
270 max maturity
exempt from SEC
Trading Flat
type
interest
- may be* income bond
- may* have interest in arrears
- may* have ex-date & record date
Corp calls debt when?
interest down
to replace high int pmts with low
Cross over refunding
rev stream continues to be paid until mature
Spread
Bid 77- 7/8
Ask 78- 3/4
% of spread
$ of spread
