Characteristics of species and types of bonds and their role in the economy
Bond - a security that certifies making her own money and reaffirms the obligation to compensate it for the face value of the security in the envisaged period of the payment of a fixed percentage.
• fact that a holder of securities of the issuer;
• the issuer's obligation to repay the debt over time;
• the right of the investor to receive in the form of interest for funds a percentage of the nominal value.
For bonds characteristic of this cycle of existence.
Bonds issued the following types:
a) domestic government and local loans;
b) corporate bonds.
Classification of bonds
Decision to issue corporate bonds issued by the Issuer and accepted protocol. Minutes of the decision to issue corporate bonds must contain:
• the name of the bond issuer and its location;
• information on the authorized capital, economic activities of officials of the issuer, the name body (audit firm);
• Data on the location of previously issued securities;
• the purpose of the issue and the form of bonds (registered or bearer);
• the total amount of emissions, the number and nominal value of the bonds;
• The number of voters;
• procedure for issuance of bonds and payment of profit on them;
• The refund in case of failure of the bond issue, the terms of purchase of the goods or the provision of services by target bonds;
• the procedure for notification of the issue and placement of the bonds;
• procedure for payment of bonds.
Joint stock companies may issue bonds in an amount not exceeding 25 per cent of the authorized capital and only after full payment of all outstanding shares.
By types of covered bonds are divided into:
- Bonds under the coverage. In fact - it unsecured paper: there is no collateral. Typically these are issued to finance projects that are not generating income;
-Revenue bond from the project (eg construction industry);
-Bonds under the special tax (road construction, for example, is covered by taxes on gasoline).
Bonds of all types paid in UAH, and in the cases provided by the terms of their release - in foreign currency.
Returns on bonds of all types paid in accordance with the terms of their release.
In case of failure or untimely performance of the Issuer's obligations to pay income on interest-bearing bonds granting the right to purchase the goods or services Free (Targeted) bonds or redemption of such bonds in the amount of a certain date collection of relevant sums are forced civil, commercial or arbitration.
From a financial point of view, the issue of bonds for companies more profitable and less expensive operation than the increase of the share capital and the additional emissions and expanding the shareholders.
The important role of government bonds (T-bills - T-bills) to finance the budget deficit. Debt financing allows to carry out social benefits, to finance government projects.
Apart from financing the budgetary requirements, another important goal of government bonds is to increase the inflow of foreign currency.
So, T-bills in the economy of Ukraine the following functions:
• The most civilized way to build market debt;
• provide the cash execution of the state budget by covering the gap between income and expenses arising from the uneven time tax revenues and expenditures;
• when conducting monetary policy are not only a regulator of currency, but also to the economy as a whole: the essence of monetary policy is to change the money supply in order to achieve growth in output, employment and prevent inflation;
• raise funds to finance the targeted state and local programs of major socio-economic importance.
Bond as well as stock and bought and sold in the market and has a market rate.
Market price of the bond is defined as:
RK = - x 100%, (6.6)
where RK - market rate bonds,% RC - the market price of bonds ¬ tion, UAH.
Hence the market price of the bond is:
Nom. # LCD 100%
As is the case with the action, the rate and price of the bond in the first place are primarily related to the level of profitability of any alternative (acceptable) way of investing (ba ¬ nkivskogo percent, government debt, etc.).:
RC = Nom. x + x 100%, (6.8)
(I + D-D
where K - yield bonds - coupon interest on account ¬ hook (in hundredths of a percent) Yes - the profitability of alternative ¬ GOVERNMENTAL capital investments (in hundredths of a percent) n - number ¬ Celebrate years remaining to maturity.
Simplified market price of the bond is as follows:
RC = Nom. C x + n, (6.9)
where C - the amount of annual coupon payments on the bond.
Thus, bonds are a tool to attract additional financial resources of the enterprise, as well as investment tool temporarily surplus funds of economic entities and citizens with a relatively low degree of risk.