The Corporate Bond Market

The Market Size In the context of a historically low level of interest rates, linked to a decreasing trend in inflation as well as in budget deficits, the corporate bond market is rapidly developing and growing. This strong tendency affects both supply and demand. While corporate supply is expanding, in relation with bank disintermediation, corporate … Read more

discount securities

Regarding the cash flow type, there exist, on the one hand, discount securities and, on the otherhand, fixed and floating coupon securities. As for maturity level, the 1-year maturity is the rontierseparating money-market instruments (with maturity below it) from bond instruments (with maturity above it). For example, Treasury securities with original maturity equal or below … Read more

Nonstandard Bonds

We discuss hereafter strips, floating-rate notes and inflation-indexed bonds. Convertible bonds and bonds with embedded options are discussed in depth in Chapter 14. Strips Strips (Separate Trading of Registered Interest and Principal) are zero-coupon bonds mainly created by stripping government bonds of the G7 countries.2 The strips program was created in 1985 by the US … Read more

Fixed-income markets are populated with a vast range of instruments.

Fixed-income markets are populated with a vast range of instruments. In the present chapter, weprovide a typology of the most simple of these instruments, namely bonds and money-marketinstruments, and describe their general characteristics. Bonds General Characteristics of Bonds.Definition of a Standard Bond.A debt security, or a bond, is a financial claim by which the issuer, … Read more