abhishreshthaa
Abhijeet S
Petro Dollar
During the oil crises of 1973, the Capital markets have played a very important role.
They accepted the dollar deposits from oil exporters and channeled the funds to the borrowers in other countries. This is called ‘recycling the petrodollars’.
Junk Bonds
A junk bond is issued by a corporation or municipality with a bad credit rating. In exchange for the risk of lending money to a bond issuer with bad credit, the issuer pays the investor a higher interest rate.
"High-yield bond" is a nicer name for junk bond The credit rating of a high yield bond is considered "speculative" grade or below "investment grade". This means that the chance of default with high yield bonds is higher than for other bonds.
Their higher credit risk means that "junk" bond yields are higher than bonds of better credit quality.
Studies have demonstrated that portfolios of high yield bonds have higher returns than other bond portfolios, suggesting that the higher yields more than compensate for their additional default risk.
Junk bonds became a common means for raising business capital in the 1980s, when they were used to help finance the purchase of companies, especially by leveraged buyouts, the sale of junk bonds continued to be used in the 1990s to generate capital
Samurai Bonds
They are publicly issued yen denominated bonds. They are issued by non-Japanese entities.
The Japanese Ministry of Finance lays down the eligibility guidelines for potential foreign borrowers. These specify the minimum rating, size of issue, maturity and so forth. Floatation costs tend to be high. Pricing is done with respect to Long-term Prime Rate.
Shibosai Bonds
They are private placement bonds with distribution limited to banks and institutions. The eligibility criteria are less stringent but the MOF still maintains control.
Shogun / Geisha Bonds
They are publicly floated bonds in a foreign currency while Geisha are their private counterparts.
Yankee Bonds
These are dollar denominated bonds issued by foreign borrowers. It is the largest and most active market in the world but potential borrowers must meet very stringent disclosure, dual rating and other listing requirements, options like call and put can be incorporated and there are no restrictions on size of the issue, maturity and so forth.
Yankee bonds can be offered under rule 144a of Sec. These issues are exempt from elaborate registration and disclosure requirements but rating, while not mandatory is helpful.
Finally low rated or unrated borrowers can make private placements. Higher yields have to be offered and the secondary market is very limited.
During the oil crises of 1973, the Capital markets have played a very important role.
They accepted the dollar deposits from oil exporters and channeled the funds to the borrowers in other countries. This is called ‘recycling the petrodollars’.
Junk Bonds
A junk bond is issued by a corporation or municipality with a bad credit rating. In exchange for the risk of lending money to a bond issuer with bad credit, the issuer pays the investor a higher interest rate.
"High-yield bond" is a nicer name for junk bond The credit rating of a high yield bond is considered "speculative" grade or below "investment grade". This means that the chance of default with high yield bonds is higher than for other bonds.
Their higher credit risk means that "junk" bond yields are higher than bonds of better credit quality.
Studies have demonstrated that portfolios of high yield bonds have higher returns than other bond portfolios, suggesting that the higher yields more than compensate for their additional default risk.
Junk bonds became a common means for raising business capital in the 1980s, when they were used to help finance the purchase of companies, especially by leveraged buyouts, the sale of junk bonds continued to be used in the 1990s to generate capital
Samurai Bonds
They are publicly issued yen denominated bonds. They are issued by non-Japanese entities.
The Japanese Ministry of Finance lays down the eligibility guidelines for potential foreign borrowers. These specify the minimum rating, size of issue, maturity and so forth. Floatation costs tend to be high. Pricing is done with respect to Long-term Prime Rate.
Shibosai Bonds
They are private placement bonds with distribution limited to banks and institutions. The eligibility criteria are less stringent but the MOF still maintains control.
Shogun / Geisha Bonds
They are publicly floated bonds in a foreign currency while Geisha are their private counterparts.
Yankee Bonds
These are dollar denominated bonds issued by foreign borrowers. It is the largest and most active market in the world but potential borrowers must meet very stringent disclosure, dual rating and other listing requirements, options like call and put can be incorporated and there are no restrictions on size of the issue, maturity and so forth.
Yankee bonds can be offered under rule 144a of Sec. These issues are exempt from elaborate registration and disclosure requirements but rating, while not mandatory is helpful.
Finally low rated or unrated borrowers can make private placements. Higher yields have to be offered and the secondary market is very limited.