Type of Bonds
Type of Bonds
Fixed rate bonds have a coupon that remains constant throughout the life of the bond. A variation are stepped-coupon bonds, whose coupon increases during the life of the bond.
Zero-coupon bonds (zeros) pay no regular interest. They are issued at a substantial discount to par value, so that the interest is effectively rolled up to maturity (and usually taxed as such). The bondholder receives the full principal amount on the redemption date.
High-yield bonds (junk bonds) are bonds that are rated below investment grade by the credit rating agencies. As these bonds are more risky than investment grade bonds, investors expect to earn a higher yield.
Convertible bonds lets a bondholder exchange a bond to a number of shares of the issuer's common stock.
Exchangeable bonds allows for exchange to shares of a corporation other than the issuer.
Subordinated bonds are those that have a lower priority than other bonds of the issuer in case of liquidation. In case of bankruptcy, there is a hierarchy of creditors.
Covered bond are backed by cash flows from mortgages or public sector assets.
Perpetual bonds are also often called perpetuities or 'Perps'. They have no maturity date.
Bearer bond is an official certificate issued without a named holder. In other words, the person who has the paper certificate can claim the value of the bond. Often they are registered by a number to prevent counterfeiting, but may be traded like cash. Bearer bonds are very risky because they can be lost or stolen. Treasury bond also called government bond, is issued by a national government and is not exposed to default risk. It is characterized as the safest bond, with the lowest interest rate.
War bond is a bond issued by a country to fund a war.
UNITED COCONUT PLANTERS BANK
The United Coconut Planters Bank, more popularly known by its initials, UCPB, or by its old name, Cocobank, is one of the largest banks in the Philippines, ranking within the top twenty banks
Fixed rate bonds have a coupon that remains constant throughout the life of the bond. A variation are stepped-coupon bonds, whose coupon increases during the life of the bond.
Zero-coupon bonds (zeros) pay no regular interest. They are issued at a substantial discount to par value, so that the interest is effectively rolled up to maturity (and usually taxed as such). The bondholder receives the full principal amount on the redemption date.
High-yield bonds (junk bonds) are bonds that are rated below investment grade by the credit rating agencies. As these bonds are more risky than investment grade bonds, investors expect to earn a higher yield.
Convertible bonds lets a bondholder exchange a bond to a number of shares of the issuer's common stock.
Exchangeable bonds allows for exchange to shares of a corporation other than the issuer.
Subordinated bonds are those that have a lower priority than other bonds of the issuer in case of liquidation. In case of bankruptcy, there is a hierarchy of creditors.
Covered bond are backed by cash flows from mortgages or public sector assets.
Perpetual bonds are also often called perpetuities or 'Perps'. They have no maturity date.
Bearer bond is an official certificate issued without a named holder. In other words, the person who has the paper certificate can claim the value of the bond. Often they are registered by a number to prevent counterfeiting, but may be traded like cash. Bearer bonds are very risky because they can be lost or stolen. Treasury bond also called government bond, is issued by a national government and is not exposed to default risk. It is characterized as the safest bond, with the lowest interest rate.
War bond is a bond issued by a country to fund a war.
UNITED COCONUT PLANTERS BANK
The United Coconut Planters Bank, more popularly known by its initials, UCPB, or by its old name, Cocobank, is one of the largest banks in the Philippines, ranking within the top twenty banks