All Things Bonds
It is a debt security issued by a corporation and sold to investors
What is corporate bonds?
It’s what we call the specific asset that backs a debt investment.
What is Collateral?
This is the rate that is usually expressed as a percentage of the bond’s face value.
What is coupon rate?
Convertible bonds can be exchanged into this
What is Stock?
A type of security with two or more instruments, it shares its name with a vehicle that runs on both gasoline and electricity.
What is Hybrid?
The failure to make required interest or principal repayments on a debt.
What is Default?
Secured bonds are seen as ___ risky than unsecured bonds
What is less?
This can happen if the company defaults on this debt
What is lawsuit?
This is the price per share at which a convertible security can be converted
Conversion Price
The ease with which a bond can be converted into cash is known as this.
What is Liquidity?
This label on a bond means that it takes priority over any other source of the company's capital
What is Senior?
The interest rates on secured bonds tend to be this.
What is lower?
The interest rate on unsecured bonds tend to be _______.
What is higher?
This determines how many shares of stock you can get from converting one bond.
Conversion Ratio
It is the a sales event where potential buyers place competitive bids on assets, either in an open or closed format.
What is an Auction?
Bonds in this category can be referred to as debentures
What is Unsecured Bonds?
This is when investors are able to claim the collateral
What is if company goes to default?
The interest rate on unsecured bonds is determined by a variety of factors. Name one
What is:
creditworthiness of the issuer
prevailing interest rates in the market
supply and demand for the bond
Convertible bonds tend to offer a ___ coupon rate or rate of return in exchange for the value of the option to convert the bond into common stock.
What is Lower?
From the Latin verb meaning "to look" and prefix for "forward", it's a formal document filed with the SEC that provides details about an investment offering to the public.
What is a Prospectus?
It is a claim or legal right against assets that are typically used as collateral to satisfy a debt
What is a Lien?
Secured bonds are also known as these type of bonds (and you can take that to the bank).
What are Mortgage Bonds?
These are two categories of unsecured bonds
What are investment-grade and high-yield (or junk bonds).
There are two main reasons a company would issue convertible bonds. Name one
What are:
Lower the coupon rate on the debt
Delay dilution of EPS
This 16-letter term refers to the measure of how likely someone will default on their bond obligations, according to a lender's assessment.
What is Creditworthiness?