The Market for Borrowing Corporate Bonds - Essay Example

Extract of sample
The Market for Borrowing Corporate Bonds

An efficient corporate bond market will lead to the efficient allocation of investment funds. An efficient market will also lead to investments in riskier assets. The types of securities which can be issued in the corporate bond market are debentures, unsecured notes and subordinated debt. One of the major reasons for developing a corporate bond markets is that the bond market provide an alternative solution or source for operational funds for the private sector other than borrowing from the equity markets and banks. This helps in improving the financial stability and allocation of credit.
Companies running successfully can decide to expand their activities and commence new projects. To raise capital the company can decide on raising the funds from the corporate bond market as it can be beneficial for the company in the long run.
The following sections give a detail understanding of corporate bonds. These sections describe the types of securities that can be issued in the corporate bond market, the types of companies that can issue it, the benefits of issuing bonds over other sources of finance, the providers of debt and their requirements. This information will certainly help the Board of Directors to reach a decision regarding the use of corporate bonds for raising capital to finance the new project. ...Show more

Summary

The corporate bond market contains those debt securities which are issued by corporations and sold to investors to raise operating capital. Corporate Bond markets acts as facilitators in issuing and trading debt securities…
Author : cormierromaine
The Market for Borrowing Corporate Bonds essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"The Market for Borrowing Corporate Bonds"
with a personal 20% discount.
Grab the best paper

Related Essays

Market Security Valuation
The idea behind the weekly update is to identify possible threats in the financial market and to handle them. This paper is a review of Weekly Market Update posted on 5 April 2012. It discuses market developments, economic trends and their implications, focus ahead and major moves.
4 pages (1000 words) Essay
Issuanc of sukuk and bonds in Malasiay
The growth of Islamic Finance has benefited many economies especially the Malaysian economy. It began with a modest issue of RM 125 Million in 1990 and it has grown to a whopping single issue of US$ 4.7 Billion. The growth in Sukuk issuance in Malaysia can be attributed to introduction of innovative Sukuk products and growing confidence by investors.
11 pages (2750 words) Essay
Economics and Finance
Stability in the financial sector is crucial for any economy. The bond market plays a vital role in stabilizing the sector by mitigating risks such as the interest-rate risk. A prominent feature of an efficient bond market is that it allows fair allocation of fund investment while also encouraging investors to diversify their portfolio by investing in assets deemed riskier.
8 pages (2000 words) Essay
Rise in Corporate Debts
The author stresses that many firms have thrived in the global markets using low-interest borrowing from central banks to boost their balance sheets. As a result, business organizations have plunged into corporate debts with the intentions of repayment during better financial times.
3 pages (750 words) Essay
Bonds
Usually, bonds are issued at face value i.e. the principal value which will ultimately be paid to the lender at the end of the bond term whereas some issuers also issue bonds at
2 pages (500 words) Essay
You are giving guidance to your client, Simmons Ltd. They wish to raise funds either through capital markets or through commercial banks. Simmonds Ltd have no security to offer and envisage that their borrowing will be unsecured. As Counsel for the compa
with respect to two sources of business finance, capital markets and commercial banks. The paper will explore possible merits and disadvantages of the two sources together with their associated legal implications
3 pages (750 words) Essay
Capital Market
Treasury securities of any country are considered as the most secured investment for the investors because these are backed by government and with full faith. Therefore, these are also referred to as
6 pages (1500 words) Essay
Bonds
Higher bond durations also lead to high price volatility. When considering the yield of a bond, the higher the yield the lower the price volatility. From the given values, WTM bonds have lower interest rates and longer durations
1 pages (250 words) Essay
The development of the Chinese money market and its critical issues for future development
iberalization regime was to improve effectiveness of the money markets; make the capital markets more robust for them to effectively provide liquidities and fund for portfolios; and also to render operations in the foreign exchange market more vibrant (Mehran, Quintyn, and
12 pages (3000 words) Essay
The Development of Chinese Bond Market and Its Critical Issues for Future Development
The county’s equity market has growth by a considerable margin with its great unpredictability and institutional organization attracting notable attention (Tong, 2005, p. 271). Economic
8 pages (2000 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT