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    Alea Mae Therese A. Bermejo

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    aleaaaaa

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    Alea Mae Therese A. Bermejo

    Uploaded by

    aleaaaaa
    2 views7 pages

    Original Title

    Alea Mae Therese a. Bermejo

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    Copyright:

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    Download as pptx, pdf, or txt
    2 views7 pages

    Alea Mae Therese A. Bermejo

    Uploaded by

    aleaaaaa

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 7

    UNDERSTANDIN

    G
    CORPORATE BONDS
    Characteristics,
    Advantages, and
    Disadvantages
    What is
    Corporate Bond?
    A corporate bond is a debt instrument
    issued by a corporation to raise
    capital. It represents a loan made by
    an investor to the corporation.

    1 Funding Expansion

    2 Operational Needs

    3 Refinancing Debt
    Characteristics of
    Corporate Bonds

    Issuer: Corporations and industries


    1 issue bonds to investors
    Maturity: can range from short-
    2 term to long-term.
    Coupon rate: The interest rate that the bond issuer
    3 agrees to pay bondholders, typically expressed as
    an annual percentage of the bond's face value.

    Face Value: Also known as par value, it is


    4 the amount the bondholder will receive at
    maturity.
    ADVANTAGES DISADVANTAGES

    • Higher Returns • Credit Risk


    • Fixed Income • Interest Rate Risk
    • Diversification • Inflation Risk
    • Liquidity • Liquidity Risk
    Types of
    Corporate Bonds
    Secured Bonds: These bonds are backed
    by specific assets of the issuing
    corporation, providing additional security
    to bondholders in case of default.

    Unsecured Bonds: Also known as


    debentures, these bonds are not backed
    by specific assets and rely solely on the
    issuer's creditworthiness.

    Convertible Bonds: These bonds can be


    converted into a predetermined number of
    shares of the issuing company, offering
    potential for capital appreciation.
    Callable Bonds: These bonds can be redeemed
    by the issuer before the maturity date,
    usually at a premium price. This feature
    allows issuers to refinance debt if interest
    rates decline.
    How to invest in
    Corporate Bonds

    Direct Purchase

    Bond Funds

    Brokerage
    Accounts
    -ALEA MAE THERESE A. BERMEJO

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