WHAT IS CALL OPTION & PUT OPTION IN BONDS? stringlengths 12 375 | Bond Option is a contract between seller and buyer to be executed in the future at a predefined time and price (irrespective of current market price). A call option gives the buyer the right to buy the bonds but does not create an obligation on either party to execute the option. A put option provides the seller with the right to sell the bonds but does not create an obligation on either party to complete the option. Bonds with embedded call options are called callable bonds, and Bonds with embedded puttable options are called puttable options. stringlengths 3 10.9k |
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What is Call / Put option date? | Call / Put option date is the date on which issuer or investor can exercise their rights to redeem the security. |
-2023 Change / Correction in Name / Address correction. | Please note, SEBI vide their Circulars have mandated:Furnishing of PAN, Address with PIN code, Email address(optional), Mobile No., Bank Account details, Specimen Signature & Nomination by holders of physical securities (collectively, called KYC requirement), and that “From January 1, 2022, RTAs shall not process any s... |
-2023 View/Download Fillable-Transmission/Name Deletion form | View/Download -Fillable-Application form for Name Deletion/Transmission / Transposition |
-2023 Exchange of Share Certificate | Please note, SEBI vide their Circulars have mandated:Furnishing of PAN, Address with PIN code, Email address(optional), Mobile No., Bank Account details, Specimen Signature & Nomination by holders of physical securities (collectively, called KYC requirement), and that “From January 1, 2022, RTAs shall not process any s... |
-2023 Non receipt of Certificates | Please note, SEBI vide their Circulars have mandated:Furnishing of PAN, Address with PIN code, Email address(optional), Mobile No., Bank Account details, Specimen Signature & Nomination by holders of physical securities (collectively, called KYC requirement), and that “From January 1, 2022, RTAs shall not process any s... |
Are all the bonds / Debenture are secured ? | The investor is requested to find the details in the Prospectus / Information memorandum whether they are issued as secured or unsecured. |
Can I have the Contact Centre E-mail and Tel-Number. | Email-R-TEmail-BondsEmail-Public-Issues |
Can I withdraw my money invested in bonds anytime before maturity? | For Listed bonds, If you want to sell them before maturity, you can do so in the secondary market at market price(market price may vary from par-value). For Private placement requested to refer the offer document of the Issuer |
From where can I get specific details about the Terms of Issue of the debentures I hold? | The issuers compiles the terms of Issue for every series / issue of the debentures / bonds. Investors can refer to the terms of the issue from the offer documents posted by the issuer on their website or write to the issuer directly. |
How can I convert my electronic holding into paper form? | An investor can choose to reconvert his electronic holding into physical form at any time through his DP. However, some companies issue securities in Demat mode only. Hence physical certificates are not issued. Investors are requested to refer the offer document before submission of debenture certificates for Remat. |
How can I update the Bank Details in my securities held in physical form ? | For securities held in physical mode complete Form ISR-1 duly signed by the holder(s) stating the details of the Folio nos. / Name of the company, and other details along with;(i) bank details (Bank account number, Bank and Branch Name and address, pin code & IFSC, MICR details),(ii) self-attested copy of the PAN card ... |
How do Bonds give higher returns than FDs? Is there any risk involved? | FD rates are lower than bond interest rates. Banks have to maintain CRR(Cash Reserve Ratio) as per regulations laid down by the central bank. The banks have to reserve a portion of capital received via FDs; the entire capital cannot be lent. This reserved capital can be utilized to supply closures (or pre-closures) in ... |
How do I convert my paper certificates into an electronic holding and will I continue to receive Interest? | To dematerialize your holding, you should first open an account with a Depository Participant (DP) of your choice. You may then hand over to your DP, the certificates along with the 'Dematerialisation Request Form' (DRF). Only the securities registered in your name can be submitted for dematerialization. Your DP will t... |
How do I Record Change of Address for Securities held in physical mode ? | For securities held in Physical Form, you are requested to complete the details as mentioned in Form ISR-1, duly signed by the holders(s) of the securities, quoting the folio number, and name of the company, and providing the new address with pin code along with any one document listed below should be sent toEmail-R-T ... |
How do I Register Tax forms such as Form 15G/H? | You are requested to visit our website and select the option Tax Exemptions Registration.The companies which are presently availing online facilities for submission of Tax Exemptions forms shall be available in the said option. Select the desired Company and fill up the necessary information and upload the duly complet... |
How do I transfer physical securities? | As per the SEBI regulations, if one holds shares in the physical form, he/she would not be able to transfers the securities in physical form and the Company shall not process such request unless the securities are held in the dematerialized form with a depository. Should you wish to transfer, we request you to get the ... |
How do I transmit securities held in demat mode? | For securities held in Demat mode, please contact your depository participant. |
How redemption amount will be paid upon maturity of bonds.? | Redemption notice is sent to the investor by email / physical letter intimating upcoming redemption and requesting to check the address and bank details available in the records of the RTA and update the same in case of any change prior to a pre-fixed cut-off date. All such requests received for updation received prior... |
I am the legal heir in respect of the sole holder who is now deceased. How do I transmit the securities held in physical mode? | If the bonds were held in the sole name of the deceased bondholder the same can be transmitted in the names of maximum three joint legal heirs. With the introduction of Form-ISR-4, transmission of physical securities shall be done only in demat form, thereby legal heirs are requested to quote their demat account, or op... |
If the Physical holding is in joint names and either of the holders is deceased, what is the procedure for deletion of name? | The procedure to be followed for deletion of name in the records is as below: Letter duly signed by the surviving joint holder(s), along with Form ISR-4. Original bond certificates for the entire holding to enable deletion. Annex a duly attested copy of the death certificate of the deceased bondholder, either by a Nota... |
I have applied for debenture in physical mode but I have not received the debenture certificate yet, what should I do? | The certificate would not have been received by you due to any of the below reasons:- It has been dispatched but could not be delivered to your address due to either incomplete address or it is returned undelivered as door is locked or no such person at the address. The dispatch of certificates is held back due to reas... |
I have old certificates? How do I exchange with new certificate? | For exchange of certificates on account of capital reduction or change in FV, or on account of torn or defaced certificates, kindly write back to us for share-related certificates to Email-R-T and for bonds related to Email-Bonds |
is any one availble on chat? | Presently the IDIA Chatbot service is automated, and there is no human involved. The facility to chat with an agent is coming soon. |
Is there a lock-in period for Bond? Can I withdraw my money invested in bonds anytime before maturity? | Bonds are 100% tradable securities. This means that there is no lock-in on your bond investment. If you want to sell them before maturity, you can do so in the secondary market at market price(market price may vary from par-value). |
I want to know the details of Interest /Maturity payments paid to me on the debentures held by me. Where should I enquire? | You can view your interest details on the Issuer Companies website. Alternatively you can contact us on the below: Email-Bonds |
I want to talk to an agent / contact center | We are in the process to launch this facility, till then kindly contact us on the following:Focus AddressEmail-R-T |
The interest amount received by me is lower than what I received earlier month, why is it so? | The difference in amount could be because of the day count convention or as per the terms of the offer document. Please refer to the offer Document of the Issuer for more details. Alternatively you may write to:Email-BondsFocus Address |
What are bonds and debentures? | Bonds and debentures are debt investment instruments with a Fixed Rate of Return and Fixed Maturity Period. While Bonds are securities that are mostly issued by the government, debentures are always issued by corporations. Bonds and Debentures are issued by these entities to raise money from investors as loans used to ... |
What are the differences between Bonds and Debt Mutual Fund? | Bonds are debt securities issued by entities like corporates or government organizations for a predefined duration. Debt Mutual Funds are Mutual Funds that invest in debt securities such as Bonds, Debentures, Commercial Papers, and other Fixed Income Securities. Debt MFs are an indirect way of investing in Bonds. For f... |
What is a Bond? | Bond is an instrument showing the indebtedness of the borrower (issuer company) to an investor evidencing the investment. A bondholder is a creditor of the issuer and not a shareholder. |
What is a Bond / Debenture ? | A Bond / Debenture is a debt instrument where the issuer of the security agrees to repay the investor, the amount borrowed and interest, over a specified period of time. |
WHAT IS BOND MARKET? | The bond market is a financial market where debt securities are issued and traded. The issuers sell bonds or other debt instruments in the bond market to fund the operations of their organizations. |
What is customer care number? | You are requested to write to us / get in touch on the followingFocus AddressEmail-R-T |
What is Day count convention? | Day count convention refers to the norm for considering the days for which the interest is computed. Interest is normally computed on a 365 days a year basis on the principal outstanding on the NCDs. However, if period from the Deemed Date of Allotment / Anniversary date of Allotment till one day prior to the next anni... |
What is Face value of a Bond / Debenture ? | Face Value (FV) is also known as the par value or principal value. Coupon (interest) is calculated on the face value of a bond. FV is the price of the bond, which is agreed by the issuer to pay to the investor on the maturity date. |
What is Maturity date? | The maturity date is the date on which the principal and due interest amount are paid to the bondholder by the issuer. The maturity date defines the lifespan of the bond. The bondholder is entitled to receive interest payouts till the date of maturity. After the maturity date, the contractual obligation of the bond iss... |
What is Maturity / Redemption Value? | Maturity / Redemption Value is the amount paid by issuer on the Maturity date other than coupon payment is called redemption value. |
What is the difference between a Bond and a Debenture ? | Debenture is a long-term security yielding a fixed rate of interest issued by a company. These can be secured by the assets of the company or unsecured. A bond is an instrument yielding a fixed interest income generally issued by a government organization. However, these two terms and generally interchanged in common... |
What is the difference between buyback and redemption ? | Buyback is an early exit option to redeem the bonds after a particular period but prior to the maturity of the bonds. If the option to redeem the bonds prior to the maturity date is available with the Issuer, it is called call option. If the option is available with the investor, it is called a put option |
What is the relevance of Record date? | Payment of Interest is made to those NCD holders whose names appear in the register of Debenture Holders (or to first holder in case of joint-holders) as on a Record Date. |
What should I do to receive interest payments in Electronic mode (NECS / Direct credit /NEFT / RTGS ) | If you are holding in Demat mode you should get your Bank details including 9 digit MICR and the IFSC code updated with your Depository participant or if you hold securities in physical mode you can forward the request letter duly signed, along with Original Cancelled Cheque to us, at the addressFocus AddressAlternativ... |
Why am I receiving my Interest in physical mode ? | Interest is paid in physical mode in case incomplete Bank details are registered with your Depository participant if you hold securities in Demat mode or if the securities are held in physical mode, and your folio is still not KYC compliant. |
Why should I choose bonds over fixed deposits? | Bonds and FDs are both low-risk securities. Still, you should choose Bonds over Fixed Deposits because :Bonds provide higher interest returns than FDs.Bonds are tradable, but FDs are not.Bonds can satisfy various financial requirements like generating a regular income stream, savings tax on interest income, savings tax... |
Why should I invest in Bonds? | Here are a few points that justify why you should consider investing in Bonds.Bonds provide a fixed returnBonds are unaffected by the market fluctuationsBonds give higher returns than FDsThe perceived level of risk in Bonds is low. In fact, it's lower than that of Debt Mutual Funds |
Why should I invest in the Fixed Income Market (Bonds and Debentures)? | Bonds’ fixed income market can provide investors returns as high as 9 - 10% per annum or more.Investments in Bonds and Debentures are more rewarding and reliable mode of growing your money than the existing options of fixed deposits and mutual funds. Moreover, you get the additional benefits of minimum to low risk (for... |
Why would I receive interest payment in physical mode although I have furnished Bank details with my Depository participant (for electronic holdings) and the RTA for physical holdings? | This could be due to any of the following reasons: MICR code not updated IFSC code not updated Incorrect account number updated. Bank name and branch missing. |
ADDITIONAL TIER I BONDS (AT1 BONDS) | Tier I Bonds also called Perpetual Bonds. As per BASEL III norms, theoretically, these bonds can be carried on till infinity. In reality, they come with a call option after 5 years or 10 years from the date of issuance. It is a popular option among Banks to raise capital to meet their core capital (Tier1 capital) needs... |
Can there be any risk in Bond Investment? | Considering the Risk Pyramid, Bonds fall into the category of low-risk securities just like Fixed Deposits. There are a couple of risks involved.Default risk: The loss that an investor faces when issuer defaults(fail to return principal amount or Interest payments or both)Liquidity risk: This loss comes into picture on... |
Comparison with Fixed income instruments - Bonds vs. PPF vs. FDs vs. ETF. | Here are a few Fixed Income Instruments.Bonds: They are pure fixed-income investment options. They come with a fixed annual return and fixed maturity period.Public Provident Fund: PPF is a saving scheme offered by the Central Government.Fixed Deposits:These instruments are offered by banks and non-banking financial org... |
INTERNATIONAL SECURITIES IDENTIFICATION NUMBER | International Securities Identification Number(ISIN) is the universally recognizable unique code given to securities. The respective country’s National Numbering Agency provides ISIN. In India, SEBI has assigned ISIN’s responsibility to the National Securities Depository Limited (NSDL). RBI regulates NSDL. ISIN consist... |
What are NCDs? Explain the difference between Bonds and NCDs. | NCD stands for Non-Convertible Debentures. NCDs are debt instruments that provide fixed returns. NCDs are issued by Corporates to raise capital.NCDs and Bonds are both debt instruments that return fixed income to the investor. The few differences between NCDs and Bonds are listed below.Read moreNCDs are issued by Corpo... |
What are the different types of Bonds? | Here is the list of different types of Bonds available.Government bonds: Government bonds are issued by the Central Government. They are also known as Government Securities or ‘'GSecs’.’ These Bonds carry the highest level of safety guaranteed by the Central Government and hence do not carry any credit rating.Read more... |
WHAT DOES BASIS POINTS (BPS) MEAN? | One Basis Point(BPS) is equal to 1/100th of 1%. It is a standard unit of measurement used to indicate a change in bond yield or percentages in the bond market. Small changes in yield or interest rates make a huge impact. Measuring and expressing such minute changes in the market is essential, and the same is done in te... |
WHAT DOES CREDIT RATING MEAN FOR BONDS? | A credit rating is an evaluation of the credit risk of a prospective debtor, predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debtor defaulting. |
What does the term Bond Duration mean? | Bond Duration measures the percentage change in a Bond’s price with a 1% change in its yield level. For example, if a Bond has a duration of 5 years, then it means that for a 1% change in its yield, the Bond price will change by 5%.Say Bond Price is 100, Bond Yield is 6%, and Bond Duration is 5 years.Case 1 : Yield inc... |
WHAT IS ACCRUED INTEREST? | This is the interest earned by an investor for a given period of time,The bond issuer pays the bondholder a fixed interest on a predetermined schedule. However, if a bond were sold between its interest payment dates, the purchaser would have to pay the market price of the bond plus the appropriate fraction of the accru... |
What is BOND CONVEXITY? | The measure of the change in the bond duration for every 1% change in the market interest rates is called the Bond Convexity.There can be an accelerated change in bond price with a change in the interest rate in the market. As an example, say 1% change in the market interest rate causes the Bond price to change by x% t... |
WHAT IS BRICKWORK RATINGS MEAN? | Brickwork Ratings is a SEBI registered credit rating agency that has also been accredited by RBI and impaneled by NSIC. Brickworks has rated issues of a large number of banks including SBI, Bank of Baroda, Bank of India, Canada Bank, Corporation Bank, Punjab National Bank, Andhra Bank, and many others. |
WHAT IS CONSIDERATION AMOUNT IN BOND? | The loan amount or principal paid by the bond investor is a consideration, in exchange for the borrower or bond issuing company’s promise to repay the principal and interest as per the agreed clauses. |
WHAT IS PAR-VALUE AND MARKET PRICE FOR BONDS? | Par value is the price at which the Bond issuer issues a Bond unit. Par value is also called the face value. When a bond matures, the Bond issuer returns back the face value of the bond to the bondholder along with any outstanding interest payment.The interest payouts are also calculated based on the par value of the b... |
WHAT IS PRIMARY MARKET? | The Capital market where companies or governments directly issue securities (debt-based or equity-based) to raise funds is called Primary Market. In the primary market, the issuer sells securities at predetermined prices. The buyers in the market can be financial institutions, corporates, mutual funds, and individuals.... |
WHAT IS SECONDARY MARKET? | The secondary market is the capital market where securities are traded among investors. Trading can happen between Financial institutions, individual investors, or both. The issuer doesn’t participate in trading. The price of the securities in the Secondary Market is dependant on current demand and supply.The advantage... |
WHAT IS SETTLEMENT AMOUNT? | The settlement amount is the amount the buyer has to pay to own the bonds. The settlement amount is the sum of the market price of the Bonds and accrued interest.Settlement Amount = Market Price + Accrued InterestAccrued interest is the amount that the borrower( bondholder) is supposed to get from the bond issuer, but ... |
WHAT IS TERM SHEET? | The term sheet is a nonbinding agreement between the issuer and bondholder. It specifies the bond features such as maturity date, coupon, interest payment, liquidation preference, callability, and convertibility. Though the term sheet is nonbinding in nature, it serves as a basis for other legally binding agreements. T... |
Whats is the difference between BID PRICE AND ASK PRICE? | Market prices depend upon the demand and supply of the bonds and the credit rating of the issuer. During a transaction, buyers and sellers bargain to decide the price of the bond. The buyer’s maximum price is the “bid price” (which means the buyer is not willing to pay beyond the bid price). The lowest price quoted by ... |
Do I have to submit 15G/H for every Financial Year ? | Forms15 G/H is valid for only one financial year and a fresh form 15G/H declaration has to be submitted every year for securities held in physical mode. The duly completed forms should reach us after 1st of April every year, but before record date, to avoid deduction of tax at source. |
Do I have to submit form 15G/H if securities are in Demat mode? | YES, Form 15 G/H is also applicable for securities held in physical form. For securities held in demat form. |
I am not a taxpayer, so am I required to file a declaration for non-deduction of tax at source for my interest amount? | As per the current provision of Income Tax, Bonds / Debentures held in physical mode on which interest payable in the financial year exceeds Rs. 5000/- , are liable for deduction of tax at source. A declaration in Form 15G/H for claiming tax exemption from interest paid is required to be submitted to us. The form shoul... |
If I hold in Demat mode, is the interest earned taxable? | Income tax is not deductible at source as per the existing provisions of section 193 of the I.T Act on interest on debentures in respect of the following for Resident Debenture Holder. “On any securities issued by a company in a dematerialized form and is listed on recognized stock exchange in India. (w.e.f. June 1,200... |
I want to correct my TDS form filed with you? Kindly let me know the process. | You can write to us quoting the Company Name, Folio / DPCL & Investor name toFocus AddressEmail-R-T |
What is certificate number while submitting / filling of form 15 G/H ? | The Certificate option is only meant if your mode of holding securities is in physical form.For DP/CL (demat segment) this mode will be disabled upon click of DP/CL option. |
WHAT ARE CORPORATE BONDS? | A security issued by a company in which the company acknowledges that a stated sum is owed and will be repaid at a certain date. A corporate bond, like a government-issued bond, usually pays a stipulated amount of interest throughout its life to the holder. |
WHAT ARE FIXED INTEREST RATE BONDS? | A fixed interest rate is an unchanging rate paid on bonds. It remains the same for a predefined period of time (it can apply for the part of the term or entire term). |
WHAT ARE GOVERNMENT BONDS? | A government bond or sovereign bond is a bond issued by a national government, generally with a promise to pay periodic interest payments and to repay the face value on the maturity date. |
WHAT ARE MASALA BONDS? | Bonds issued by Indian entities in foreign countries are called Masala Bonds. And masala bonds are traded in Indian currency. The minimum maturity period is three years. The country where masala bonds need to be issued, that country must be a member of the International Organisation of Securities Commission. Indian com... |
WHAT ARE PERPETUAL BONDS? | Perpetual bonds are debt instruments that do not have fixed maturity, but they are callable in nature. Since there is no fixed maturity, the issuer must pay coupon payments forever or until the issuer calls the bonds. The bondholder can sell these bonds in the secondary market to get back his/ her investment. Investors... |
WHAT ARE TIER I BONDS (ADDITIONAL TIER I BONDS)? | Tier I Bonds also called Perpetual Bonds. As per BASEL III norms, theoretically, these bonds can be carried on till infinity. In reality, they come with a call option after 5 years or 10 years from the date of issuance. It is a popular option among Banks to raise capital to meet their core capital (Tier I capital) need... |
WHAT ARE TIER II BONDS? | As per BASEL III norms, Banks raise money via Tier II bonds to meet regulatory norms around capital adequacy. Tier II bonds are subordinated debt and hence not first to be paid during the liquidation process. Tier II bonds are senior to Tier I Bonds. Note: When a bank has to write off losses, it will first write off Ti... |
WHAT DOES STAGGERED MATURITY BONDS MEAN? | Staggered Maturity Bonds are the bonds that repay the principal amount in multiple installments. Redemption(repaying the debt) may start at any time before the bond matures, as mentioned in the Information Memorandum (IM). In the staggered maturity process, the principal amount is paid partially along with regular inte... |
WHAT IS A MUNICIPAL BOND? | Municipal Corporation or its associate issues bonds to finance public projects such as schools, hospitals, parks, roads, and bridges. These bonds are called Municipal Bonds or Muni Bonds.According to the SEBI’s guidelines, the municipality should not have a negative net worth in three previous years, and it should not ... |
WHAT IS FOREIGN BONDS? | Foreign firms issue bonds in domestic countries, and transactions happen in domestic currency; such bonds are called foreign bonds. Foreign Bonds carry additional risk, i.e., Currency Risk. They come with a high coupon rate to attract domestic investors. With foreign bonds, the issuer gets exposure to a broader range o... |
WHAT IS INFLATION LINKED BONDS? | Inflation-Linked Bonds (ILBs) are bonds for which the principal value varies with inflation. The principal rises with inflation and decreases with deflation. Inflation-Linked Bonds are designed to protect investors from inflation risk.Suppose a bond gives annual returns of 7% in a year and inflation is 3 %. Then the re... |
WHAT IS INVESTMENT-GRADE BONDS? | The set of bonds that carry relatively low risk are called as Investment Grade Bonds. Default risk is very low; hence they are given high credit ratings. Yields for investment-grade bonds are lower than the non-investment grade bonds.Note: In India, “AAA” to “BBB” rated bonds are considered as investment-grade bonds. |
WHAT IS ZERO-COUPON BOND? | Zero-coupon bonds do not pay interest, but they are sold at a discount and return full face value on redemption. The bondholder can sell these bonds before maturity at market price. The difference between the purchase amount and face value is the return that the investor gets. If a bondholder sells bonds before maturit... |
WHAT ARE HIGH-YIELD BONDS? | The set of bonds that offer relatively much higher yields than investment-grade bonds is called High-Yield Bonds or Junk Bonds. Default risk is high; they carry a low credit rating. To compensate investors for taking the risk, the issuer of high-yield bonds offers a higher interest rate. The price of high-yield bonds i... |
WHAT DOES THE TERM CURRENT YIELD MEAN FOR BONDS? | The current yield is the present interest rate that the bond is offering to its owner. This is the rate of interest that a potential buyer can expect if they acquire this bond and hold on to it for a year. Current Yield = Annual interest payment/ Current bond price. |
WHAT DOES YIELD TO WORST (YTW) MEAN FOR BONDS? | Yield to Worst is the measure of the lowest yield that a bond can return without defaulting. Yield to maturity can be the same as Yield to Worst but can be more than Yield to Worst. Generally, Yield to Call is the same as Yield to Worst. The calculation of YTW helps the investor understand the minimum returns that a bo... |
WHAT IS THE TERM YIELD TO CALL? | Some bonds have a call option where the bond issuer can redeem the bond before the maturity date. The issuer needs a call option to reduce interest rate risk and avoid damage when interest rates decline. Having a call option will allow the issuer to redeem bonds and reissue them at a lower interest rate. However, there... |
What is the term Yield used for? | The yield is the effective interest rate on bonds. The yield will vary inversely with the market price of the bond.Yield= (Coupon/ Market Price of Bond) X 100 |
WHAT IS YIELD CURVE? | Yield Curve is a line formed by joining yields having equal credit quality and have varying maturity.There are three types of the yield curve & they are:Normal: Upward yield curve indicates higher yields for bonds with longer maturity. It implies a better economy in the future, i.e., economic expansion.Read moreInverte... |
WHAT IS YIELD SPREAD MEAN FOR BONDS? | The yield spread is the difference between yields of two bonds issued by the same or different issuer and may come with varying maturity, credit rating, and risk. The yield spread is calculated and expressed in percentage or basis points.The ten-year GSecs are considered a benchmark; hence yield from corporate bonds is... |
WHAT IS YIELD TO MATURITY (YTM) ? | The yield to maturity is the total return expected from a bond if it is held to maturity. In other words, it is the internal rate of return (IRR) of a bond if the investor holds the bond until maturity, and if all payments are made as per schedule. |
What are Callable Bonds? | The callable bond is a bond that the issuer can redeem before it reaches the maturity date also known as a redeemable bond. The call date is when a bond issuer can redeem a callable bond according to the schedule. If the interest rates fall, the issuer can buyback bonds. And with revised interest rates, the issuer can ... |
WHAT ARE CAPITAL GAIN BONDS (54EC BONDS)?: | 54EC Bonds are Capital Gain Tax Exemption Bonds that provide100% tax exemption on the long term capital gain earned by selling any property. These bonds are the best options to save tax after the property sale. But conditions apply, such as the time gap between property sale and bond investment cannot exceed six months... |
WHAT ARE CONVERTIBLE BONDS? | Convertible Bonds are the corporate bonds that bear the provision to be converted into a predetermined number of common stock or equity shares. Like any other Bond, these Bonds pay coupons regularly too. Conversion to common stock happens at a specific time before maturity and usually at investors’ discretion. The issu... |
WHAT ARE SECURED and UNSECURED BONDS? | Secured Bonds are bonds that are collateralized by an issuer’s asset or future cash flows. If the issuer defaults, then bondholders can claim the asset or the cash flow generating source.Read moreUnsecured Bonds don’t come with any collateral. If the issuer defaults, unsecured bondholders can’t claim any of the issuers... |
WHAT ARE SENIOR BONDS AND SUBORDINATE BONDS? | Senior Bonds are the bonds that are considered before other junior bonds in the hierarchy of payment during liquidation. Senior Bonds come with lower risk. Subordinate bonds come with higher returns and relatively higher risk. In the extreme case of liquidation of the Bond Issuing company, “senior bonds” are paid off b... |
What is Coupon Frequency? | Coupon Frequency refers to how regularly an issuer pays the coupon to holder. Bonds pay interest monthly, quarterly, semi-annually or annually. |
What is Coupon / Interest ? | Coupon / Interest is the cash flow that is offered by a particular security at fixed intervals / predefined dates. The coupon expressed as a percentage of the face value of the security gives the coupon rate. |
What is Coupon Rate? | The Coupon or Coupon rate is the rate of interest paid by fixed-interest security such as Bond/ Debenture. It is the annual payment towards the face value of a bond. The bond issuing company pays it to the bond investor.Example: You buy a bond with the face value of Rs. 10,000, coupon rate of 10 %, and maturity five ye... |
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