Repurchase Agreements (Repos)
Repurchase agreements, commonly known as repos, serve as a secured method for short-term borrowing and lending. These transactions consist of a seller committing to repurchase a security at a predefined price on a future date. This operation essentially allows the…
Short-term Funding Alternatives
Short-term funding is key for corporations to meet immediate cash needs, maintain liquidity, and capitalize on supplier discounts. Short-Term Funding Alternatives for Non-Financial Institutions External Financing Non-financial entities can acquire immediate liquidity through various banking avenues: Uncommitted Lines of Credit…
Primary and Secondary Fixed-income Markets
Primary Fixed-Income Markets Primary bond markets are where issuers sell new bonds to investors to raise capital. This contrasts with secondary bond markets, where existing bonds are traded among investors. Debut issuers are those who approach the bond market for…
Types of Fixed-income Indexes
Purpose of fixed income Indexes Fixed-income indexes are pivotal in tracking the broad risk and return of bond markets. They serve to evaluate market performance, benchmark the performance of investments and investment managers, and lay the foundation for indexed investment…
Fixed-income Segments, Issuers, and Investors
The fixed-income market is a multifaceted arena where various instruments are traded based on distinct classifications. These instruments can be broadly categorized based on three primary dimensions: time to maturity, issuer type, and credit quality. Additionally, classifications can be extended…
Legal, Regulatory, and Tax Implications on Fixed-income Securities
AnalystPrep Summary Legal, regulatory, and tax considerations influence how fixed-income securities are issued, traded, priced, and taxed. Bonds may be classified as domestic bonds, foreign bonds, Eurobonds, or global bonds depending on the issuer, market, currency, and regulatory jurisdiction. Investors…
Fixed-income Cash Flow Structures and Contingency Provisions
Introduction Fixed-income cash flow structures determine when investors receive interest and principal payments. Contingency provisions determine whether those cash flows may change in the future. Common structures include bullet bonds, fully amortizing bonds, partially amortizing bonds, floating-rate notes, zero-coupon bonds,…
Bond Indentures and Covenants
What Are Bond Indentures and Covenants? Every bond issue is governed by a legal agreement that defines the rights of investors and the obligations of the issuer. This agreement, known as the bond indenture, establishes the terms of the bond…
Features of a Fixed Income Security
What Are the Features of a Fixed-Income Security? A fixed-income security is a financial instrument that requires the issuer to make scheduled interest payments and repay the principal to investors according to predetermined terms. These securities include government bonds, corporate…
Types of Business Models
Conventional Business Models In practice, most business models consist of these conventional models either individually or combined. Common business models are described in the table below: In practice, most business models consist of these conventional models either individually or combined….
