Trading, Funding, Issuer

Question 1

Asset-Backed Securities are:
They are part of what sector:

Answer 1

Structured financial sector

Securitized debt instruments created by securitization.

          ⬇️

Transfer ownership to LEGAL ENTITY

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ISSUE securities BACKED on Transferred assets

CF are used to pay interest and repay the principal owed to the holders securities

Examples :
Loans (mortgage, card receivables)

Question 2

Underwriting offering (IB that underwrites a bond issue) - firme

Answer 2

Buy and resells the newly issued bonds to investors or dealers

Question 3

What is a sovereign (soberana) bond.

3 types

Are they secure? What is the authority backing?

What is a Quasi-government bond? What they issue?

When a bond is non sovereign government bond ?

Answer 3

Government bond

1.Linkers (i. e inflation)

2.Floaters

3.Consols (no maturity date)

Quasi - issued by an entity that performs a lot of functions to national governments. NOT GOVERNAMENTAL
“Agency Bonds”

When national government not guarantee. (it is issued by provinces, states, etc)

Question 4

(OTC) Over the counter makert is:
Are bonds traded in OTC? How?

And open market?

Answer 4

OTC
Buy and sell orders are initiated from various locations and then matched through a communications network

Trade occurs by simultaneous change $ for bonds. Book-entry basis

Open Market
Central Bank in secondary market
(Buy and sells sovereign bonds)

Question 5

Floating rates resets periodically ?

Answer 5

Yes
based on changes on level of reference rate

Question 6

Commercial Papers:
Who can issue?
There is a secondary market?
What is the purpose?

Answer 6

1.A lot of companies
Only the big and strong have low cost CP

2. There is a secondary market
3. Funding working capital and also long term projects

Question 7

What is a sinking fund
What is it purpose?

Answer 7

1. Deposit account to pay debt
2. Reducing credit risk

Question 8

Short term Bank funds Alternative

Answer 8

CD
Interbank Funds
Central bank Funds
Retail deposits

Question 9

Repo can be compared to a… loan

Answer 9

Collateralized (the asset borrowed represents the collateral)

Question 10

What is a Shelf Registration?

Answer 10

Permit some issuers to do an additional issuing

WITHOUT prepare a new offering.

Just a simple document

Question 11

What a sinking fund is similar of?

Answer 11

Serial maturity Structure.
Differents maturitys in series
Good cash flow for investors