Bonds



Agency Bonds
These are bonds issued by a government-sponsored agency, backed by the government of the country. Such agencies are usually set up to allow access to low cost of financing for certain areas in the economy e.g. housing, power, transport, etc.


Corporate Bonds

These are long-term debt securities issued by corporations in order to raise finance for a variety of reasons, from building facilities and purchasing equipment to expanding their businesses. Corporate bonds are usually characterized by higher yields than government bonds because there is a higher risk of a company defaulting than a government. They, however, can also be the most rewarding fixed-income investments because of the risk the investors must take on. A corporation’s credit quality is very important as the higher the quality, the lower the interest rate the investors receive. Bonds issued by companies with low credit quality are high-yield bonds, also called junk bonds. Investments in high-yield bonds offer different rewards and risks than investing in investment-grade securities, including higher volatility, greater credit risk, and the more speculative nature of the issuer. Variations on corporate bonds include convertible bonds, which can be converted into company stock under certain conditions.


Supranational Bonds

Supranational entities are formed by two or more central governments with the purpose of promoting economic development for the member nations. Supranational bonds are debt securities issued by these institutions to finance their activities. Similar to government bonds, supranational bonds are regarded as very safe and have high credit ratings. Examples of Supranationals include the International Finance Corporation, the African Development Bank, the World Bank Group and the United Nations.


Sub-national Bonds

These are long-term debt securities issued by the state and local governments of a nation to finance projects for the public good like building schools, roads, hospitals and sewer systems.


Eurobonds

These are bonds issued in currencies other than the domestic currencies of the issuing entities. Eurobonds are attractive financing tools as they give issuers the flexibility to choose the countries in which to offer their bonds determined by the countries’ regulatory constraints.
Agency Bonds
These are bonds issued by a government-sponsored agency, backed by the government of the country. Such agencies are usually set up to allow access to low cost of financing for certain areas in the economy e.g. housing, power, transport, etc.


Corporate Bonds

These are long-term debt securities issued by corporations in order to raise finance for a variety of reasons, from building facilities and purchasing equipment to expanding their businesses. Corporate bonds are usually characterized by higher yields than government bonds because there is a higher risk of a company defaulting than a government. They, however, can also be the most rewarding fixed-income investments because of the risk the investors must take on. A corporation’s credit quality is very important as the higher the quality, the lower the interest rate the investors receive. Bonds issued by companies with low credit quality are high-yield bonds, also called junk bonds. Investments in high-yield bonds offer different rewards and risks than investing in investment-grade securities, including higher volatility, greater credit risk, and the more speculative nature of the issuer. Variations on corporate bonds include convertible bonds, which can be converted into company stock under certain conditions.


Supranational Bonds

Supranational entities are formed by two or more central governments with the purpose of promoting economic development for the member nations. Supranational bonds are debt securities issued by these institutions to finance their activities. Similar to government bonds, supranational bonds are regarded as very safe and have high credit ratings. Examples of Supranationals include the International Finance Corporation, the African Development Bank, the World Bank Group and the United Nations.


Sub-national Bonds

These are long-term debt securities issued by the state and local governments of a nation to finance projects for the public good like building schools, roads, hospitals and sewer systems.


Eurobonds

These are bonds issued in currencies other than the domestic currencies of the issuing entities. Eurobonds are attractive financing tools as they give issuers the flexibility to choose the countries in which to offer their bonds determined by the countries’ regulatory constraints.


Short-Term Bonds

Recently introduced to the debt capital market by FMDQ, these are debt securities issued by non-sovereign entities, for tenors between one year and not exceeding three years. These bonds close the current funding gap between short-term money market securities such as commercial papers and the traditional medium- to long-term debt capital securities. For investors, these bonds present a higher yielding alternative to short-term money market securities.

Yield

  • The current yield, or running yield, which is simply the annual interest payment divided by the current market price of the bond (often the clean price).
  • The yield to maturity, or redemption yield, which is a more useful measure of the return of the bond. This takes into account the current market price, and the amount and timing of all remaining coupon payments and of the repayment due on maturity. It is equivalent to the internal rate of return of a bond.

LIQUIDATION

''We carry out bond unlocking/liquidation to specific currencies''

Recently introduced to the debt capital market by FMDQ, these are debt securities issued by non-sovereign entities, for tenors between one year and not exceeding three years. These bonds close the current funding gap between short-term money market securities such as commercial papers and the traditional medium- to long-term debt capital securities. For investors, these bonds present a higher yielding alternative to short-term money market securities.