What are the seniorities of Corporate Bonds?
Seniority means the order of repayment in the event of a sale or bankruptcy of the respective institution, Senior debt is repaid before subordinated (or junior) debt is repaid. Subordinated debt or junior debt ranks after other debts should a company fall into liquidation or bankruptcy. In the case of Continue Reading →
Understanding Corporate Bond Risks and Yields
Risk and yield Making interest payments and returning capital at maturity will depend on the financial ability/creditworthiness of the issuing company to do so. Adverse financial conditions or weakening operating performance of the issuing company could affect its ability to make interest payments or to return capital at maturity. If Continue Reading →
Shares Vs. Bonds
Unlike dividend payments to shareholders, interest payments to bondholders by the issuer are contractual obligations and as such do not depend on the issuing company having available profits, or the company board approving interest payments. Upon maturity, the bond issuer is also required to return the capital by paying the Continue Reading →