senior unsecured bond что это

Обеспеченные и необеспеченные облигации облигации

Резервирование права не означает, что эмитент обязательно им воспользуется. Если же он решил сделать это, то должен заблаговременно сообщить об этом собственникам облигаций. Выплата доходов по таким облигациям осуществляется в таком же порядке, в каком бы она производилась, если бы выпускаемые облигации имели фиксированный срок ‘жизни’.
Обеспеченные и необеспеченные облигации
Эмитент может выпускать облигации обеспеченные (secured bonds) и необеспеченные (unsecured bonds). Обеспечение влияет на степень надежности облигаций. Выпуск обеспеченных облигаций означает, что эмитент гарантирует выполнение своих обязательств в части как возврата основной суммы долга, так и выплаты доходов по нему. При этом исключается возможность неполного возврата, неполной выплаты дохода или несвоевременного их осуществления.
В качестве обеспечения могут выступать предметы недвижимости, государственные ценные бумаги и другие средства, достаточные для покрытия долга. В случае выпуска обеспеченных облигаций эмитент в условиях выпуска обычно указывает, какие именно средства являются средствами обеспечения. Например, он может заявить, что определенные облигации обеспечены недвижимостью (mortgages backed bonds) либо ценными бумагами (securities backed bonds).
Когда эмитентом является государство или муниципальные органы, считается, что их облигации всегда обеспечены (даже если об этом не говорится в условиях выпуска) в силу того, что они не могут обанкротиться или исчезнуть внезапно. Иными словами, они гарантированы ‘добрым именем эмитента’ (in good faith). Кроме того, государственные и местные облигации считаются обеспеченными ввиду наличия у государства и муниципальных органов права собирать и устанавливать налоги (fax powers).
Если эмитент выпускает необеспеченные облигации, он должен сообщить об этом в условиях выпуска.
Обеспеченность или необеспеченность облигаций влияет на размер дохода по ним. Обеспеченные облигации являются надежными, и поэтому процент по ним устанавливается меньший, чем процент по необеспеченным облигациям.

Источник

Understand the Security Types of Corporate Bonds

To understand corporate bonds, you must first understand key concepts about how the corporate debt relates to the issuer’s business capital structure and how the debt, itself, is constructed. These points are crucial for the investor to understand before investing in any corporate debt products.

Separating Corporate Bonds

Corporate bonds are fungible—have the ability to be invested into by investors—debt products. These bonds are available in a variety of risk-reward levels depending on the underlying company’s creditworthiness. Corporations will float bonds to finance expenditures and to fund day to day operations. Bonds are often more assessable to businesses than bank loans and often speed up the time-lag in receiving the needed funds.

There are separate classifications of bonds that dictate specifically how the bond relates to the capital structure of the issuing corporation. This is significant because the bond classification actually dictates the payout order in the event the issuer cannot meet its financial obligations—known as default.

When comparing debt to equity, debt always has seniority in the payout order. When comparing unsecured debt to secured debt, secured debt has seniority. For example, preferred stock-holders receive payout before common-stock shareholders do.

1. Secured Corporate Bonds

This is a ranking structure that is used by issuers to prioritize debt payout. At the top in this structure would be the senior “secured” debt for which the structure is named. This is in contrast to structures where the age of the debt places determines which has seniority. If a bond is classified as a secured bond, the issuer is backing it with collateral. This makes it more secure (usually having a significantly higher recovery rate) in the event the company defaults. Examples of this are companies that issue a secured corporate bond by backing it with assets like industrial equipment, a warehouse or a factory.

2. Senior Secured Bonds

Any security labeled «senior» in such a structure is one that takes primacy over any other company’s sources of capital. The most-senior securities holders will always be first to receive a payout from a company’s holdings in the event of default. Then would come those security-holders whose securities are deemed second-highest in seniority, and so forth until the assets used to pay off such debts run out.

3. Senior Unsecured Bonds

Senior unsecured corporate bonds are in most respects just like senior secured bonds with one significant difference: There is no specific collateral guaranteeing them. Other than that, such senior bondholders enjoy a privileged position in the event of default with respect to the payout order.

4. Junior, Subordinated Bonds

After the senior securities are paid out, the junior, unsecured debt will next be paid out from what assets remain. This is unsecured debt, meaning no collateral exists to guarantee at least a portion. Bonds in this category are often referred to as debentures.

Such unsecured bonds only have the issuer’s good name and credit rating as security. Junior or subordinated bonds are named specifically for their position in the payout order: Their junior, or subordinate, status means they only are paid out after senior bonds, in the event of a default.

5. Guaranteed and Insured Bonds

These bonds are guaranteed in the event of default not by collateral, but by a third party. This means that in the event the issuer cannot continue to make payouts, a third party will take over and continue to make good on the original terms of the bond. Common examples of this category of the bond are municipal bonds backed by a government entity or corporate bonds backed by a group entity.

Such insured bonds possess the second level of security in that you have the credit rating of two separate entities instead of just one to rely upon to secure the bond. However, this second entity can only provide as much security as its own credit rating allows, so it’s not 100% insured. Still, guaranteed or insured bonds are much less risky than non-insured bonds, and thus typically carry with them a lower interest rate. Insured bonds will always have a higher credit rating because there are two companies guaranteeing the bond. However, this security premium comes at the cost of a reduced final yield on the bond.

6. Convertible Bonds

Some corporate bond issuers hope to attract investors by offering convertible bonds. These are simply bonds that the bondholder may choose to convert into common stock shares. These shares are typically from the same issuer and issued at a preset price even if the stock’s market price has grown since the bond was first issued.

The price of convertible bonds is a bit more fluid as they are rated upon the company’s stock price and prospects at the time they are issued. Additionally, because these convertible bonds give investors expanded options, they typically have a lower yield than standard bonds of the same size.

Correlation to Recovery Rates

The recovery rate for a corporate bond or any similar type of security refers to the amount of the bond’s total value. This includes both interest payments and the principal that are likely to be recovered in the event the issuer defaults. This recovery rate is typically expressed as a percentage that compares its value during a default to that of the par value of the bond. Or, to put it more simply: The recovery rate is the corporate bond’s payout value in the event of a default.

Recovery rates may vary significantly from bond-to-bond and issuer-to-issuer. Relevant factors include:

The Bottom Line

Any investor in corporate bonds or any other debt instrument should pay significant attention to the security classification of the debt. The different security types are directly linked to the potential recovery rates in the event of a corporation’s default. Moreover, other factors affect the recovery rate, which at any stage should also be taken also into account.

Источник

senior unsecured rating

Смотреть что такое «senior unsecured rating» в других словарях:

Emergency Economic Stabilization Act of 2008 — This article is about one division of an enacted statute. For the entire statute, see Public Law 110 343. For the enacted rescue program, see Troubled Asset Relief Program. The Emergency Economic Stabilization Act of 2008 (Division A of Pub.L.… … Wikipedia

Enron scandal — The Enron scandal was a financial scandal involving Enron Corporation Former (NYSE ticker symbol: ENE) and its accounting firm Arthur Andersen, that was revealed in late 2001. After a series of revelations involving irregular accounting… … Wikipedia

Loss given default (LGD) — Loss Given Default or LGD is a common parameter in Risk Models and also a parameter used in the calculation of Economic Capital or Regulatory Capital under Basel II for a banking institution. This is an attribute of any exposure on bank s… … Wikipedia

Loss given default — Basel II Bank for International Settlements Basel Accords Basel I Basel II Background Banking Monetary policy Central bank Risk … Wikipedia

Exchange-traded note — An exchange traded note (or ETN) is a senior, unsecured, unsubordinated debt security issued by an underwriting bank. Similar to other debt securities, ETNs have a maturity date and are backed only by the credit of the issuer. ETNs are designed… … Wikipedia

Securitization — is a structured finance process, which involves pooling and repackaging of cash flow producing financial assets into securities that are then sold to investors. The name securitization is derived from the fact that the form of financial… … Wikipedia

Tranche — In structured finance, a tranche (misspelled as traunch or traunche) is one of a number of related securities offered as part of the same transaction. The word tranche is French for slice, section, series, or portion. In the financial sense of… … Wikipedia

Economic Affairs — ▪ 2006 Introduction In 2005 rising U.S. deficits, tight monetary policies, and higher oil prices triggered by hurricane damage in the Gulf of Mexico were moderating influences on the world economy and on U.S. stock markets, but some other… … Universalium

Credit default swap — If the reference bond performs without default, the protection buyer pays quarterly payments to the seller until maturity … Wikipedia

Credit enhancement — Securities Securities Bond Stock Investment fund Derivative Structured finance Agency security … Wikipedia

Security (finance) — This article is about the negotiable instrument. For the legal right given to a creditor by a borrower, see Security interest. Securities Securities Bond … Wikipedia

Источник

unsecured bond

Смотреть что такое «unsecured bond» в других словарях:

unsecured bond — noun the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future • Syn: ↑debenture, ↑debenture bond • Ant: ↑secured bond • Hypernyms: ↑bond, ↑bond certificate … Useful english dictionary

bond — 1 n 1 a: a usu. formal written agreement by which a person undertakes to perform a certain act (as appear in court or fulfill the obligations of a contract) or abstain from performing an act (as committing a crime) with the condition that failure … Law dictionary

bond — Synonyms and related words: Fannie Mae, Federal Agency bond, Ginnie Mae, Oregon boat, Series E bond, Series H bond, accident insurance, accord, accouple, accumulate, actuary, addition, adherence, adhesion, adhesive, adjunct, adjustment bond,… … Moby Thesaurus

bond certificate — noun a certificate of debt (usually interest bearing or discounted) that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the… … Useful english dictionary

Bond — /bond/, n. 1. Carrie (nee Jacobs), 1862 1946, U.S. songwriter and author. 2. Julian, born 1940, U.S. civil rights leader and politician. * * * I In construction, the systematic arrangement of bricks or other building units (e.g., concrete blocks … Universalium

bond — An IOU issued by a borrower to a lender. Bonds usually take the form of fixed interest security issued by governments, local authorities, or companies. However, bonds come in many forms: with fixed or variable rates of interest, redeemable or… … Big dictionary of business and management

bond — An IOU issued by a borrower to a lender. Bonds usually take the form of fixed interest securities issued by governments, local authorities, or companies. However, bonds come in many forms: with fixed or variable rates of interest, redeemable or… … Accounting dictionary

bond — A certificate or evidence of a debt on which the issuing company or governmental body promises to pay the bondholders a specified amount of interest for a specified length of time, and to repay the loan on the expiration date. A long term debt… … Black’s law dictionary

bond — A certificate or evidence of a debt on which the issuing company or governmental body promises to pay the bondholders a specified amount of interest for a specified length of time, and to repay the loan on the expiration date. A long term debt… … Black’s law dictionary

bond — bond1 bondable, adj. bondability, n. bonder, n. bondless, adj. /bond/, n. 1. something that binds, fastens, confines, or holds together. 2. a cord, rope, band, or ligament … Universalium

unsecured — /un si kyoord /, adj. 1. not secured, esp. not insured against loss, as by a bond or pledge: an unsecured loan. 2. not made secure, as a door or lock of hair; unfastened. 3. not protected against tapping or interception, as a telephone line or… … Universalium

Источник

What Is Senior Unsecured Debt?

Related

If your small business borrows money through multiple loans or the issue of bonds, it can put different levels of security on the repayment of the borrowed money. The value of a senior unsecured classification on debt owed comes into play if your company cannot make the required debt payments or declares bankruptcy. The pecking order of creditors in a bankruptcy depends on the type of debt they hold.

Secured vs. Unsecured

Secured debt gets that security from an asset pledged as collateral for the loan. Mortgages, vehicle loans and equipment loans are common types of secured debt a business may have. Unsecured debt is not secured by any specified assets as collateral. The holder of unsecured debt in default would make claims against the general assets of the company.

Senior vs. Subordinated

If your business defaults on the payments due to debts, the creditors will make claims against the company’s cash or assets. Senior debt has first claim to be paid if there is not enough money to go around to all of the debtors. All other debt besides the senior debt will be subordinated debt. The agreement attached to senior debt prevents your company from issuing more debt with equal or higher seniority. Senior debt is usually unsecured and backed by the general assets of the company.

Bankruptcy Claims

If a company goes bankrupt, the creditors will line up and collect from the company assets based on the type of debt. Secured creditors will receive the assets pledged against the debt. Senior, unsecured creditors get paid off first out of the company’s other assets until those debts have been repaid in full. Any remaining assets will go to the subordinated creditors.

Rates and Terms

For a lender or bond buyer, senior unsecured debt is viewed as the most secure claim against the borrowing company. As a result, senior debt will carry a lower interest rate than the company’s subordinated debts. The senior debt holders may have a say or veto power over how much subordinated debt a company can take on. Too much outstanding debt is bad for all creditors, no matter the level of seniority.

Источник