Corporate bond - a bond issued by corporations (legal entities) to finance their activities. As a rule, a corporate bond is a long-term debt instrument with a maturity of more than a year.
Form: Documentary bearer security or uncertificated security.
Corporate Bonds Classification
1) Depending on the method of collateral: Secured KOs - secured by a pledge of any movable or immovable property of the enterprise. In case of non-payment of a debt or% of it, a pledge is realized, the proceeds of which are used to satisfy the claims of the bond holder; Unsecured QoS - represent a common claim law and do not have special security. In case of refusal to make payments on bonds, no specific property can be arrested, that is, creditors do not have any additional protection. The issuance of unsecured bonds can afford the largest corporations, whose solvency is beyond doubt.
2) From the point of view of maintaining the validity period of the bond: With an unchanged term ; With a variable term - with a reduced loan term, m. recalled ahead of schedule
3) According to the terms of loan repayment: All bonds of one loan are repaid at one time ; The issuer issues bonds in several series and each series has its own maturity date .
4) From the point of view of stability of income: With a solid% income - income remains unchanged throughout the bond; With floating income - the% rate is attached to the% rate on T-bills .
5) From the point of view of the fullness of the rights granted to their owners: Convertible bonds - a bond that gives the investor the right to choose: consider this security as a clean bond with profitability laid down in its conditions or, upon reaching the agreed term, convert it into a certain number of (ordinary) shares ; Bonds with an order - give the right to purchase new bonds or shares at a fixed price.