The corporate bond market is a market-based instrument for financing the economy. Traditional bonds of the state savings loan are not able to ensure the effective development of this segment of the national economy. Currently, there are no uniform recipes that would lead to the early formation of an effective sphere of corporate bond circulation; they could completely replace, for example, domestic government foreign currency loan bonds or other assets in a multi- market market economy. However, a sufficient number of empirical facts have already accumulated related to the formation and development of national markets for corporate assets in various countries of the world.
Of course, numerous acts that exempt from taxation income on bonds of legal entities, as well as allowing to include the costs of legal entities to issue bonds in the cost of production, can give impetus to the formation of the scope of corporate bonds in the country. In this paper, on the basis of a theoretical generalization of empirical facts, as well as from the standpoint of observing the economic characteristics of the market, a law is formulated to preserve economic benefits in the primary corporate bond market, and a model for the functioning of corporate bonds is developed.
Long-term analysis of interest rates in developed and emerging debt markets showed that, like all types of government securities, corporate securities in these markets occupy their niche, and their yield is limited by the yields of alternative instruments.
All types of government securities limit the lower limit of corporate bond yields, since in their time structure (interest payment periods and circulation period) they are closest to the time structure of bond loan payments. It is important for the investor that all types of government securities have a yield lower than corporate bonds by at least the amount of the risk premium so that it is profitable for him to buy corporate rather than government bonds.
The upper limit of corporate bond yield is determined by the interest rate on bank loans. When placing bonds, the issuer assumes the risk of non-placement of bonds on the terms and conditions proposed by it, measured by yield. For the issuer, the cost of a bond loan should be more attractive compared to the interest rate on bank loans, so that it would be more profitable for him to place a bond loan rather than take bank loans.
The level of corporate bond yield is acceptable for market participants when, in order to interest investors, the issuer offers a premium on the yield of state assets, but at the same time it takes interest rates lower than those of existing sources of bank lending by the amount of DE. Therefore, in a functioning market, corporate bond yields should be within these boundaries.
In order to comply with the economic interests of all market participants, the yield on corporate bonds cannot be lower than that available for all types of government securities, and the cost of a bond loan cannot be higher than the credit rate. In addition, the cost of a bond loan will always be higher than the yield of a corporate bond, since a bond loan is associated with additional costs for the issuance, placement, circulation and redemption of corporate bonds. Finally, investor returns will be lower than corporate bond yields by the amount associated with tax payments.