Corporate Bonds Flashcards
1
Q
Debentures
A
Secured Debt Securities
2
Q
Loan Stock
A
Unsecured Debt Securities
3
Q
Two types of Debentures
A
- Fixed Charge over Assets
Named asset e.g. land or building - Floating Charge over assets
Pool of assets e.g. Inventory
4
Q
Features of Corporate bonds
A
- Fixed Rate coupon
- Floating Rate
- Zero - coupon bonds
- Convertibles
- Fixed Redemption period
5
Q
Floating Rate Bond
A
Also Known as Variable rate bonds
Rate of interest linked to = a benchmark rate such as LIBOR
6
Q
Domestic Bond
A
All Same country
- UK Company
- Sterling
- UK Debt Markets
7
Q
Foreign Bond
A
Currency and Market are same
- UK Company
- Dollar
- US Debt Markets
8
Q
Eurobonds (International Bonds)
A
- Any currency other than currency of market
Currency + Market different = Euro Bond - Denominated in Euro Currency
- Market mainly OTC
- Example of Bearer Security e.g. Bearer documents
- Regulated by ICMA
- Interest paid gross
9
Q
EuroBond issued
A
- Internationally , underwritten by syndicate of banks
- issued by International bonds , governments and companies
10
Q
Asset Backed Securities
A
- Secured by a pool of assets
- Mortgage payments
- Special Purpose Vehicle : company set up to raise capital
e. g. Bank sells pool of assets to SPV
11
Q
Covered Bonds
A
- Similar to ABS but remains on the issuer balance sheet
- Increased risk
- Holder has priority claim on pool if issuer defaults
- NO SPV
