The risks: American investors in U.S. bonds can be hurt by fluctuating market interest rates and by defaults
by bond issuers.
Investors that purchase bonds are paid interest
by the bond issuer.
Generally, the higher the risk of default
by the bond issuer, the greater the interest or coupon.
Callable bonds can not be recalled at any time
by the bond issuer.
Callable bonds are canceled and not brought back
by the bond issuer.
Bonds — Bonds represent debt owed
by the bond issuer (the entity seeking the loan) to you, the bond purchaser (the lender or creditor).
Collateral pledged
by a bond issuer (debtor) to an investor (lender) to secure repayment of the loan.
Not exact matches
The secondary market is composed of
bonds that were issued in the past and may be traded until redeemed
by the
issuer.
Greylock, a $ 990 million hedge fund run
by Willem J. «Hans» Humes, says in a filing with the Securities and Exchange Commission that international junk
bonds are «generally considered to be predominantly speculative with respect to the
issuer's capacity to pay,» and that defaulters sometimes end up shielded
by «principles of sovereign immunity.»
High - yield
bonds represented
by the Bloomberg Barclays High Yield 2 %
Issuer Capped Index, comprising issues that have at least $ 150 million par value outstanding, a maximum credit rating of Ba1 or BB + (including defaulted issues) and at least one year to maturity.
Green
Bond new issues
by type of
issuer from 2013 to 2018 (USD bn)
Last month, the U.S. - based coffee company debuted in the international markets with the first ever yen sustainability
bond by a non-Japanese
issuer.
Since green
bonds are backed
by the full credit of the underlying
issuer, returns are not dependent upon the success of any one particular venture and therefore investors are not subject to project risk.
Historically, the green
bond market has been driven
by supranational development organizations, including the World Bank and International Finance Corporation (IFC), and they continue to be the most active
issuers.
Just as individuals have their own credit report and rating issued
by credit bureaus,
bond issuers generally are evaluated
by their own set of ratings agencies to assess their creditworthiness.
All of the
bonds are certified by the Climate Bonds Initiative, an international nonprofit that evaluates bonds and their issuers for their green credent
bonds are certified
by the Climate
Bonds Initiative, an international nonprofit that evaluates bonds and their issuers for their green credent
Bonds Initiative, an international nonprofit that evaluates
bonds and their issuers for their green credent
bonds and their
issuers for their green credentials.
«This first phase includes navigational improvements to help investors more easily find information about individual
bonds by drilling down through the intuitive map - based search functionality, and access clearly presented pricing, ratings and material information about individual
issuers and their securities.»
a municipal
bond that is secured
by an escrow fund; the escrow fund comes from the
issuer floating a second
bond issue and using the proceeds from that second
bond issue to purchase government obligations, typically U.S. Treasuries, proceeds from the second
bond issue create an escrow fund to mature at the first call date of the first
bond issue to pre-refund that issue;
bond issuers will typically do this during times of lower interest rates to lower their interest costs
However, because the agency
bond issuers are guaranteed
by the federal government these
bonds are generally considered safer than even the safest corporate
bonds.
The paper has been developed
by a working group comprising public sector green
bond issuers from the four Nordic countries Denmark, Finland, Norway and Sweden.
An AAA rating is the highest possible rating assigned to the
bonds of an
issuer by credit rating agencies.
Tax - exempt
bonds may be issued under the Internal Revenue Code only
by limited types of
issuers for limited types of projects.
An AA + rating is generally one step below the highest rating (AAA) assigned to the
bonds of an
issuer by credit rating agencies.
If your
bond issuer goes bankrupt, secured creditors like banks are paid first, followed
by unsecured creditors like bondholders.
Bond ratings, which typically range from AAA / Aaa (highest) to D (lowest), are assigned
by credit rating agencies such as Standard & Poor's, Moody's and / or Fitch, as an indication of an
issuer's creditworthiness.
These
bonds are issued
by less - creditworthy companies that carry a higher risk of default than better - rated
issuers.
Cons: The primary negative associated with investment grade floaters is that when issued they generally offer current yields that are significantly lower than a typical fixed rate
bond of the same maturity offered
by the same
issuer.
The market has yet to reach critical mass, but given the kinds of projects funded
by state and local governments, «the market should be a natural
issuer of green and social impact
bonds,» notes Victoria Irving, Equity Strategist for the Global Sustainability Research team.
are
bonds that are secured
by the full faith and credit of the
issuer.
General obligation
bonds issued
by local units of government are secured
by a pledge of the
issuer's property taxing power and must be authorized
by the electorate.
The
bond price at re-sale is determined largely
by the risk of the
issuer defaulting on payments, and the remaining term.
Bonds are a debt instrument with a guaranteed return, so the issuer isn't really affected by re-sale of existing b
Bonds are a debt instrument with a guaranteed return, so the
issuer isn't really affected
by re-sale of existing
bondsbonds.
«Use of
bond cap is a statewide, year - long process and as in prior years, (New York CIty's) request for 2016 (
bond) cap will be considered as part of a comprehensive review of requests submitted
by all eligible
issuers.»
A CDS or Repo Agreement is usually concerning a
bond issued
by a private
issuer, not a sovereign
issuer for which default risk is minimal.
Indications are that potential Yen
issuers like Ghana should have at least a double B rating
by the rating agencies before they can acquire a Japan Bank for International Cooperation (JBIC) guarantee, a pre-requirement for Samurai
bonds.
Charter schools need to be aware of and understand the scope of services, costs and fees that are charged
by the parties in a
bond financing transaction in order to ensure that charges are reasonable and for legitimately required services provided to the
issuer.
That half a million dollars will be made up
by the $ 50 - per - pupil increase in state aid negotiated
by Gov. Mark Dayton, even if it is money most taxpayers would rather not be handing to the
bonds issuers.
Callable
bonds (also called redeemable
bonds) can be redeemed
by the
issuer earlier than the maturity date, usually at the choice of the
issuer.
While covered
bonds are secured
by a pool of assets, there is no guarantee that the cover pool will adequately or fully compensate investors in the event that an
issuer defaults on its payment obligations.
Callable or redeemable
bonds are
bonds that can be redeemed or paid off
by the
issuer prior to the
bonds» maturity date.
The manager aims to produce high income returns
by investing predominantly in investment grade or high - quality
issuers, including the subordinated corporate
bond issues of investment grade business.
The amount that the holder of a
bond will be paid
by the
issuer at maturity, which can differ from the
bond's value on the open market.
You should also try to diversify among individual
bonds, perhaps
by holding a number of securities from different
issuers.
If you structure your ladder to have
bonds expire at regular intervals, cash can be available on a consistent, scheduled basis (assuming no default
by the
issuer of the
bond).
That way the
issuer can save money
by paying off the
bond and issuing another
bond at a lower interest rate.
By buying a
bond, you're giving the
issuer a loan, and they agree to pay you back the face value of the loan on a specific date, and to pay you periodic interest payments along the way, usually twice a year.
Additionally, in terms of market structure, some of the
issuers in the offshore market are foreign names and a portion of the offshore RMB
bonds received international
bond - level ratings, whereas the onshore market is dominated
by domestic
issuers, and they are rated
by local ratings agencies only.
Our extensive selection of
bonds covers the entire fixed income market, allowing you to narrow your choices
by issuer, maturity, yield, and credit quality.
If the
issuer in fact chooses to redeem the
bond at such time, the additional $ 300 paid
by the
issuer to the holder is considered a «premium» and will produce a $ 300 long - term capital gain to the holder.
Legal opinion: A written opinion
by a
bond counsel stating whether or not a
bond issue conforms with all the laws of the
issuer, and the state and federal governments.