tailieunhanh - A Guide to Issuing Bonds

Raising capital is one of the most important challenges for any business, be it a company, a statutory authority, town council, Government or other institution. A business needs money to expand or to pay for its day-to-day operations. It can get money in various ways - by earning revenue from its goods and services, by raising capital from shareholders or by borrowing. I n Fiji, Businesses have traditionally relied on capital from shareholders and bank loans. | 1140 A Guide to Issuing Bonds Contents Information Disclaimer The contents of this booklet are believed to be accurate at the date of issue. They are intended for general purposes only and not considered as providing recommendations or advice. The CMDA does not give warranty or accept any liability whether arising from negligence or otherwise for any error or omission or any loss arising from acting on the information in this publication except where under law liability cannot be excluded. Introduction What are Bonds Key Features of Bonds Why Issue Bonds Risks and Challenges of Issuing Bonds Understanding Bond Price Structuring Bonds - Practical Issues The Bond Issue Process Listing and Trading Bonds on the SPSE Appendix 1 1 1 3 3 4 6 8 10 11 A Guide to Issuing Bonds 2 Introduction Raising capital is one of the most important challenges for any business be it a company a statutory authority town council Government or other institution. A business needs money to expand or to pay for its day-to-day operations. It can get money in various ways - by earning revenue from its goods and services by raising capital from shareholders or by borrowing. Bonds Bonds belong to a class of investments called fixed income securities. Other examples are bills and notes. Fixed income securities are like contracts where the investor lends money to a business for an agreed interest rate and period. Interest is usually paid in regular installments. _ Businesses have traditionally relied on capital from shareholders and bank loans. This booklet introduces an alternative way of raising capital - issuing bonds. We hope to answer the following questions What are bonds and how do they work Why might bonds be a good method of raising capital What are the risks of issuing bonds How do you go about issuing bonds What are Bonds Lend money by buying bonds Issuer Bondholder Pay regular coupons Repay amount borrowed at expiry ofbond . .