Author Archives Thomas

by Thomas in Corporate Bonds, FAQ, Investments April 19, 2012

How will the French Election affect Corporate Bonds?

If the French elect a socialist and then they start printing money, Europe will then see a reduction in government bond ratings followed by eventual major inflation. The assets therefore to buy are real assets such as gold, property and selected blue chip stocks. However if investors are cautious, and Continue Reading →
by Thomas in FAQ April 02, 2012

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 →
by Thomas in FAQ March 16, 2012

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 →
by Thomas in FAQ March 16, 2012

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 →
by Thomas in FAQ March 16, 2012

Assessing the Creditworthiness of Corporate Bond Rates

To assist investors determine the risks of investing in a particular bond issue, rating agencies such as Standard & Poor’s, Moody’s and Fitch Ratings conduct research into many of the corporate bond issues available to institutional investors. Through this research, which includes assessing the financials of the issuing company and Continue Reading →