Mastering Investment Banking Securities

4

Capital markets instruments

Overview of capital markets instruments

Bond pricing fundamentals

Other bond markets

OVERVIEW OF CAPITAL MARKETS INSTRUMENTS

To raise capital for periods longer than one year, companies turn to capital markets. The lenders and borrowers tend to transact without the bank acting as an intermediary. The medium- and long-term securities that pay fixed coupon at regular intervals and repay the principal at maturity (redemption) are typically called bonds. There are many variations of this basic concept, some are discussed below.

Domestic, foreign and Eurobonds

The first distinction is made by the country of bond issue. A domestic bond is issued in the currency of the country of origin, whilst a foreign bond is issued ...