Bonds issued by a national government in a foreign currency, in order to finance the issuing country's growth. Sovereign debt is generally a riskier investment when it comes from a developing country, and a safer investment when it comes from a developed country. The stability of the issuing government is an important factor to consider, when assessing the risk of investing in sovereign debt, and sovereign credit ratings help investors weigh this risk. |||An unfavorable change in exchange rates, and an overly optimistic valuation of the payback from the projects that the debt is used to finance, can make it difficult for countries to repay sovereign debt. The only recourse for the lender is to renegotiate the terms of the loan - it cannot seize the government's assets. A country that defaults on its sovereign debt will have difficulty obtaining a loan in the future.
A debt security issued by a national government within a given country and denominated in a foreign currency. The foreign currency used will most likely be a hard currency, and may represent significantly more risk to the bondholder. |||The government of a country with an unstable economy will tend to denominate its bonds in the currency of a country with a stable economy. Because of default risk, sovereign bonds tend to be offered at a discount. Brady bonds, which are issued by governments in developing countries, are a popular example of sovereign debt securities.
1. A loan with a below-market rate of interest. 2. Loans made by multinational development banks and the World Bank to developing countries. Typically, soft loans have extended grace periods in which only interest or service charges are due. They also offer longer amortization schedules and lower interest rates than conventional bank loans. |||Also known as "soft financing".
A feature added to convertible fixed-income and debt securities. The provision dictates that a premium will be paid by the issuer if early redemption occurs. |||A sweetener added to increase securities' attractiveness, a soft call provision acts as an added restriction for issuers should they decide to redeem the issue early.
A means of repaying funds that were borrowed through a bond issue. The issuer makes periodic payments to a trustee who retires part of the issue by purchasing the bonds in the open market. |||Rather than the issuer repaying the entire principal of a bond issue on the maturity date, another company buys back a portion of the issue annually and usually at a fixed par value or at the current market value of the bonds, whichever is less. Should interest rates decline following a bond issue, sinking-fund provisions allow a firm to lessen the interest rate risk of its bonds as it essentially replaces a portion of existing debt with lower-yielding bonds.From the investor's point of view, a sinking fund adds safety to a corporate bond issue: with it, the issuing company is less likely to default on the repayment of the remaining principal upon maturity since the amount of the final repayment is substantially less. This added safety affects the interest rate at which the company is able to offer bonds in the marketplace.
A type of credit facility, often a bank, that accepts an arrangement that finances projects via secondary obligations. SNIFs will guarantee payment to the lender if the borrower defaults. In this way, SNIFs ultimately act as a form of insurance for the lender. |||SNIFs are used most frequently by weak borrowers of credit that pose a higher risk of default. The borrower pays the SNIF a commission in return for its secondary guarantee. SNIFs are often reported as off-balance sheet items for financial reporting purposes.
A bond that pays an initial coupon rate for the first period, and then a higher coupon rate for the following periods. |||In other words, the coupon "steps up". For example a five-year bond may pay a 4% coupon for the first two years of its life and a 6% coupon for the final three years.
A type of bond that is repaid by revenues derived from taxation of a particular activity or asset. These bonds are repaid with either excise taxes, special assessment taxes or ad valorem taxes. |||For example, say a special tax bond is be issued to fund the building of a new hospital wing dedicated to the treatment of cancer. An excise tax levied on cigarettes at the point of sale would be used to pay the debt to bondholders. Another example of a project for which a special tax bond may be issued is the building of a new freeway. People who live in areas would be assessed an increased property tax based on their likelihood of using the new road.
登录
工商服务
危机公关
金融律师
app开发
财税服务
金融牌照
网站建设
知识产权
企业征信
审计评估