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Template:M intro repack Debt security: Difference between revisions
Template:M intro repack Debt security (view source)
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Amwelladmin (talk | contribs) (Created page with "{{dpn|/dɛt/ /sɪˈkjʊərɪti/|n| }}A freely transferable financial instrument evidencing indebtedness. Contrast debt securities to equity securities — instruments such as shares, warrants units, which pay neither principal nor interest, but rather account for the overall performance of the company who issue them. Debt securities generally rank ahead of equity securities in the capital structure of the issuer. This is because an issu...") |
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'''[[Subordinated]] notes''': Debt instruments that are not paid until the senior notes are paid in full. These typically pay a higher interest rate, are for a longer period (and are sometimes perpetual) and are there to give the issuer access to stable, long-term, cheap but otherwise equity capital-like funding. In the banking world these may form part of the banks [[Alternative tier 1 capital|alternative tier one]] or tier 2capital. | '''[[Subordinated]] notes''': Debt instruments that are not paid until the senior notes are paid in full. These typically pay a higher interest rate, are for a longer period (and are sometimes perpetual) and are there to give the issuer access to stable, long-term, cheap but otherwise equity capital-like funding. In the banking world these may form part of the banks [[Alternative tier 1 capital|alternative tier one]] or tier 2capital. | ||
===By funkiness=== | ===By funkiness=== | ||
'''Vanilla''': Normal corporate bonds just pay a fixed or floating rate and give you your money back at maturity. These are, technically, credit-linked — in that an investor’s return is dependent on the solvency of the issuer — but are otherwise pretty standardised in terms. Don’t expect investors to parse the prospectus too closely. | |||
'''[[Repackaging]]s''': See “weird and wacky securitised derivatives” - jam a [[par asset swap]] in an [[espievie]] and away you go... | |||
*[[Securitisation]]s — monetising future cashflows, once so rock ’n’ roll that even Bowie was into it until someone had the idea of... | *[[Securitisation]]s — monetising future cashflows, once so rock ’n’ roll that even Bowie was into it until someone had the idea of... | ||
*[[Collateralised debt obligation|Collateralised debt ob —]] | *[[Collateralised debt obligation|Collateralised debt ob —]] DON’T SAY IT YOU ARE NOT ALLOWED TO SAY IT IT IS LIKE VOLDEMORT | ||