20 Terms
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Finance
Industry: Financial services
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Finance
Positive covenants
Financial services; Finance
These are agreements where company has to generate funds by selling assets, has to keep assets in good condition and has to regularly get the financial statements audited for compliance purposes.
Call provision
Financial services; Finance
This is a feature in a bond that allows the company to buy back the bond at a price that is decided. The period for using this provision is restricted though.
Floating rate bonds
Financial services; Finance
These bonds come with a floating rate of coupon payments, which means that coupon payments may vary based on the market fluctuations until the maturity. Floors and ceilings are often used to protect ...
Bond rating
Financial services; Finance
Bond rating indicates the probability of a default risk that is attached to the bond. Companies are usually ready to pay for a good rating since bond rating is what attracts investors.
Junk Bonds
Financial services; Finance
These are bonds that have a rating that is less than BB. These bonds do come with a high yield but also have a high default risk attached to them.
Bond refunding
Financial services; Finance
Bond refunding is when a company replaces a bond entirely or partially. Refunded bonds usually have a really good rating some cash is kept aside for safety by the issuer of bond.
Zero coupon bonds
Financial services; Finance
These bonds do not have a coupon payment attached to them which helps in evading taxes. These are also offered at a price that is lower than the par value.
