金融英语chapter 5 Bond Market.ppt

Financial English 金融英语 recle02@Course Structure Chapter 1 Money, the Functions of Money and the Financial System Chapter 2 The Banking system Chapter 3 Foreign exchange rates International Monetary System Chapter 4 Money Market Course Structure Chapter 5 Bond Market Chapter 6 Equity Market Chapter 7 Foreign Exchange Market Chapter 8 International Settlements Chapter 9 Insurance Basics Course Structure part1 Bond Essence and Characteristics of Bonds Issuance of Bonds Types of Bonds part2 Bond Market Functions of Bond Market Credit Rating of Bonds Negotiation of Bonds Preview The last chapter discussed short-term securities that trade in a market we call the money market. This chapter talks about the first of several securities that trade in market we call the capital market. Capital markets are for securities with an original maturity that is greater than one year. These securities include bonds, stocks, and mortgages(抵押贷款) .  How the capital markets operate will be discussed before launching into the study of bonds. Essence of Bonds A debt instrument issued for a period of more than one year with the purpose of raising capital by borrowing. Generally, a bond is a promise to repay the principal along with interest (coupons) on a specified date (maturity). 债券是一种有价证券，是社会各类经济主体为筹措资金而向债券投资者出具的，并且承诺按一定利率定期支付利息和到期偿还本金的债权债务凭证。 Essence of Bonds A bond is a formal contract to repay borrowed money with interest at fixed intervals. Thus a bond is like a loan: the issuer is the borrower (debtor), the holder is the lender (creditor), and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term investments, or, in the case of government bonds, to finance current expenditure. Difference between Bonds and Stocks The major difference between the two is that stockholders have an equity stake in the company (i.e., they are owners), whereas bondholders have a creditor stake in the company (i.e., they are lenders)