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national debt
Buying government bonds is a relatively safe investment method for ordinary citizens, with the lowest risk and the guarantee of national reputation. Therefore, the national debt has the reputation of Phnom Penh bond, with high security, large financing scale and easy realization.
National debt has its own advantages, mainly in the following aspects:
(1) has strong liquidity. Because the listed national debt is listed on the exchange, there are many investors and strong liquidity. As long as the stock exchange opens, investors can entrust trading at any time. Therefore, if investors do not intend to hold a bond for a long time to redeem the principal and interest at maturity, it is better to invest in listed government bonds to ensure that they can be sold smoothly.
(2) Easy to buy and sell. In the exchange market, investment in listed treasury bonds can be entrusted directly by telephone or computer, and it is convenient and time-saving to go to the bank or counter in person like depositing or buying unlisted treasury bonds. In the inter-bank market, large commercial banks provide market quotation services for national debt, with low bid-ask spread and good liquidity.
(3) The relative bank deposit income is high and stable. Compared with bank deposits, all kinds of listed government bonds have higher returns. This high rate of return is mainly reflected in two aspects: First, the interest rate is high. The yield of listed government bonds at the time of issuance and listing was higher than the bank deposit interest rate at that time. Second, while enjoying the convenience of withdrawing (selling) money at any time like a demand deposit, its yield is much higher than the deposit interest rate.
(4) debt interest is exempt from income tax, with high credit and good liquidity, but its yield is lower than other bonds with the same maturity.
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Financial institution debt
Financial bonds are bonds issued by banks and non-bank financial institutions. In the United Kingdom, the United States and other European and American countries, bonds issued by financial institutions are classified as corporate bonds. In China, Japan and other countries, bonds issued by financial institutions are called financial bonds.
Financial bonds can effectively solve the contradiction between insufficient sources of funds and maturity mismatch in banks and other financial institutions. Generally speaking, banks and other financial institutions have three sources of funds, namely, absorbing deposits, borrowing from other institutions and issuing bonds. One of the characteristics of deposit funds is that when the economy is in turmoil, depositors are easy to rush to withdraw money, which leads to unstable sources of funds; The funds obtained by borrowing from other commercial banks or central banks are mainly short-term funds, while financial institutions often need long-term investment and financing, so there is a contradiction between the source of funds and the use of funds within the time limit, and issuing financial bonds effectively solves this contradiction. Generally, bonds cannot be exchanged in advance before maturity, but can only be transferred in the market, thus ensuring the stability of raised funds. At the same time, financial institutions can flexibly set the term when issuing bonds, for example, for some long-term project investments, they can issue bonds with longer term. Therefore, issuing financial bonds can enable financial institutions to raise stable and flexible funds, which is conducive to optimizing asset structure and expanding long-term investment business.
The advantages of financial institution bonds are not only good credit, but also higher yield than national debt, good liquidity and bilateral quotation.
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Central Bank Bill
Central bank bills are issued by the People's Bank of China in the inter-bank market through the bond issuance system of the People's Bank of China, and are issued to primary dealers in the open market business. At present, there are 50 primary dealers in open market business, including commercial banks and securities companies. Central bank bills are discounted through competitive bidding. Of the 34 central bank bills issued, 19 was placed by non-competitive bidding, and there were 9 bilateral bidders, including China Industrial and Commercial Bank, China Agricultural Bank, China Bank and China Construction Bank. Since the issuance of central bank bills is not allocated, other investors can only invest in the secondary market.
The significance of issuing central bank bills in China lies in:
(1) enrich the operating tools of open market business and make up for the shortage of cash coupons for open market operation. After the introduction of central bank bills, the central bank can use bills or repurchase, as well as their combination, to carry out "balance control and two-way operation" and roll central bank bills, which increases the flexibility and pertinence of open market operations and enhances the implementation effect of monetary policy.
(2) Provide the benchmark interest rate for the market. The short-term yield of national debt is generally used as the benchmark interest rate in the world. However, judging from China's situation, the vast majority of treasury bonds issued by the Ministry of Finance are more than three years old, and the stock of treasury bonds market is very small. On the premise that the Ministry of Finance can't form a rolling issuance system of short-term treasury bonds, the central bank can issue bills, which can solve the shortage of open market operating tools. At the same time, setting the term of bills can improve the market interest rate structure and form the market benchmark interest rate.
(3) Promoting the development of the money market. At present, there are few money market tools in China. Due to the lack of short-term money market tools, many institutional investors can only chase long-term bonds, which brings long-term interest rate risk in the bond market. The issuance of central bank bills will change the current situation that there are basically no short-term instruments in the money market, and provide an important tool for institutional investors to flexibly adjust their positions and reduce the pressure on short-term funds.
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Short-term financing bonds
Short-term financing bonds refer to securities issued by non-financial enterprises with legal personality in the inter-bank bond market according to the prescribed conditions and procedures and agreed to repay the principal and interest within a certain period of time. Short-term financing bonds are unsecured short-term promissory notes issued by enterprises. In China, short-term financing bonds refer to securities issued and traded by enterprises in the inter-bank bond market in accordance with the conditions and procedures of the Measures for the Administration of Debt Financing Instruments for Non-financial Enterprises in the Inter-bank Bond Market, and the principal and interest are agreed to be repaid within a certain period of time. It is a direct financing method for enterprises to raise short-term (within 65,438+0 years) funds.
The advantages of short-term financing bonds mainly include: First, the income of short-term financing bonds exceeds the national debt, financial institution bonds and central bank bills in the same period. Second, the term of short-term financing bonds is within 1 year, and the turnover is fast. At the same time, short-term financing bonds also have their shortcomings: on the one hand, the term is short and the risk of reinvestment is high; On the other hand, there is credit risk.
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Medium-term notes (MTN)
Medium-term notes are a kind of debt securities that are continuously issued in the form of public offering during the registration period after being registered and approved by the regulatory authorities once. Its biggest feature is that issuers and investors can freely negotiate to determine the relevant issuance terms (such as interest rate, term and whether it is linked to other asset prices or indexes). Like corporate bonds, the early medium-term notes were unsecured and unsecured pure credit bonds, but at present, the issuance of various structured financial products (including traditional asset-backed securities) also takes the form of medium-term notes. The history of medium-term notes is much shorter than that of corporate bonds-it has been more than 30 years. However, whether in developed countries or emerging economies, the status of medium-term notes is no less than that of corporate bonds.
At present, the main issuance period of medium-term notes is 3-5 years, which is longer than that of short-term financing notes, and generally provides higher yield, and the liquidity is generally worse than that of short-term financing notes.
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Corporate bonds and corporate bonds
Corporate bonds are bonds issued by joint stock limited companies or limited liability companies, and the securities law clearly stipulates that non-corporate enterprises may not issue corporate bonds. Corporate bonds are bonds issued by institutions affiliated to central government departments, wholly state-owned enterprises or state-controlled enterprises, and the restrictions on issuers are narrower than those on corporate bonds.
The duration of corporate bonds is generally longer than that of medium-term notes, while medium-term notes usually provide better yields and are less liquid than medium-term notes.
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convertible debentures
Convertible corporate bond is a kind of corporate bond that is given the right to convert shares, also known as convertible bond. The issuing company stipulates in advance that creditors can choose favorable opportunities to convert their bonds into equivalent shares (common shares) of the issuing company according to the conditions stipulated at the time of issuance. Convertible corporate bonds are a kind of mixed bonds. When investors are not clear about the development potential and prospects of the issuing company, they can invest in this bond first. The company to be issued has remarkable business performance and optimistic business prospects. When its stock market is bullish, it can convert bonds into stocks to benefit from the company's development. Convertible bonds provide investors with another investment option. Therefore, even if the income of convertible bonds is lower than that of ordinary bonds, such bonds are still welcomed by investors in the balance of investment opportunities. Convertible corporate bonds are quite popular in foreign bond markets. This kind of corporate bonds first appeared in Britain, and now American companies also issue this kind of corporate bonds. After Japan 1938 revised the Commercial Law, some companies began to issue such bonds. Because convertible bonds have the advantages of being convertible into stocks, their issue interest rate is lower than that of ordinary bonds.
The issuance of convertible corporate bonds presupposes three basic conversion conditions. These three conversion conditions are: conversion price or conversion ratio; Contents of shares issued at the time of conversion; Request conversion period. Convertible bondholders must follow these three basic conversion conditions when exercising their conversion rights.
1. Characteristics of convertible corporate bonds
(1) has the dual nature of bonds and stocks.
(2) Interest is fixed.
(3) Share swap premium (generally 5% ~ 20%).
(4) The issuer may have the right to redeem before maturity.
(5) Investors have the right to sell back in advance.
2. Characteristics of convertible bonds
(1) For joint-stock companies, issuing convertible bonds can raise the required funds when the stock market is depressed; It can reduce foreign exchange risk, discuss the conversion between bonds and stocks, and optimize the capital structure; You can even get a premium income from the conversion.
(2) For investors, investors can buy convertible bonds, which can make their investment tools more flexible and make their investment choices wider. For example, investors can hold bonds and earn bond interest, or change hands in the bond market, and under certain conditions, they can be converted into stocks to get dividends and bonuses, or buy and sell in the stock market to earn the difference. Therefore, bonds are very attractive to investors.