Important Bond Features

To date we have mainly considered bond examples using plain vanilla debt instruments.

That is, debt with a par value in the investor’s domestic currency, a fixed term to maturity, and a consistent coupon rate. But bonds may also vary from this simple structure. There may be features incorporated into the debt terms that affect the issue.

These features may significantly impact the debt issue and returns to investors.

Bond features are extremely important to bear in mind when investing in bonds.

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A Few More Bond Types

As Types of Bond Issues was getting long, I separated out a few of the more interesting bonds.

While the previous post listed some common bonds, I do not think too many of you will invest in Certificates for Automobile Receivables or Collateral Trust Bonds.

However, if you do any fixed income investing, you will come across the instruments below. (more…)

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