Bonds are securities certifying the fact of obtaining a loan by the issuer from an investor who is entitled to regular dividend fixed income, and after their repayment, to the amount of the nominal value. The economic essence of these notes is similar to lending. It can be said that bonds are a debt receipt received by an investor from a borrower in exchange for his money.
Enterprises issue securities, attracting the flow of funds for their development. Each of them has a different face value and favorable conditions. Based on this, it can be concluded that the buyer is previously familiar with future income, and the legal entity with its costs. The process of transferring the right to the creditor is maximally simplified, and there is no need to draw up a pledge. Basically, the purchase of securities has an average or long duration - from one year to thirty years. Issuers begin to issue bonds in circulation when they can afford to take money on credit. At the same time, they should have predicted incomes for the future, due to which the debt will be repaid on time, and also be strong in economic terms.
Bonds are issued as necessary by the borrower, in order to obtain additional material resources for various social programs, modernization of the production process or the introduction of innovative technologies. There is a significant detail, according to which shares and bonds are distinguished. This is a stable income received by the investor from the bill for a certain period of time and the loss of its value at the time of repayment. Another important detail is that the owner of the bond only finances the activities of the issuer, having won a full fee, but does not have the right to take part in the management. Securities have a fixed income, which is indicated on the form of a special certificate. The interest on calculating cash is called the coupon rate. It can be floating or constant, which depends on the type of bond. These may be special coupons with which interest is paid annually or quarterly, depending on the terms of issue of notes. The income received in this way is called a bond coupon.
His example can be called the well-known bank deposit. Trading bonds and they themselves have many types and classifications. Therefore, each individual case is best considered based on the list of securities legally enshrined in a particular state. Beginners are wondering: "Where can I get bonds?" This can be done in several ways: buy at over-the-counter trading, through a bank, investment fund or brokerage company. For direct purchase of securities you need to contact any stock exchange. You can keep access to the purchase, having a special account and a trading terminal. For a wider understanding of this topic, I recommend that you familiarize yourself with what a bond assessment is .