Describe the basic features and characteristics of bonds. How can bonds be secured? What is the difference between a callable bond and a convertible bond?

A bond is a bond with a maturity of more than one year, which is issued by joint stock companies according to trade or capital market laws in order to find resources, with the same nominal value and the same phrase. These securities, which are based on the coupon and / or principal on which the borrower pays their debts when they are due, are intended to provide cheap and long-term funds to companies. In addition to the maturity and interest rate risk in government bonds, securities issued by private companies have a broader customer risk, which is symbolic in government bonds. For this reason, the company whose bonds will be taken must undergo a sound financial analysis process. Each corporate bond issue includes an agreement between the issuer and the investor. The conditions of issuance of bonds are generally subject to the specific conditions and regulations of the countries and markets to which they are issued. Types of bonds, how they will be issued, supply conditions in public bonds, conditions and methods of quotation to stock exchanges, conditions of recall, conditions and forms of interest and other interests, rights of bond holders and obligations of issuing company, primarily commercial law and capital market law regulations. Bonds are sold on discount basis. When an industrial organization or financial institution issues bonds and sells them by discounting them to the buyer, the buyer makes underpayments to the seller at the discount rate but collects the bond nominal value at the end of the term.

Secured Bond is a type of bond secured by the issuer of a particular asset, which is a form of credit security. By default, the entity gives the bond ownership to the bondholders. Secured bonds can also be provided by revenue streams from the project they use to fund bond issues.

There is a difference between callable and convertible bonds. If a bond is issued with an option before the maturity period, it is called a callable bond, and if a bond is subsequently issued with a number of ordinary stock options, the share can be changed and it is convertible bond. The type of bond to be invested depends largely on the nature and expectations of the investors; For example, savings bonds are not an attractive option for an investor who wants to earn a fixed income.