Bond is one of the main financing tools in the capital market. Compared with other financing methods, issuing bonds can usually raise large-scale funds to meet the long-term capital needs of enterprises.
Compared with short-term debt financing methods such as bank loans, issuing bonds can obtain long-term funds at lower interest rates. Because bonds have fixed interest rates and maturities, investors have more confidence in the solvency of enterprises, so enterprises can obtain funds at lower interest rates.
Issuing bonds often needs to be carried out in the open market, which has a positive effect on improving the visibility and image of enterprises in the market. At the same time, by issuing bonds, enterprises can establish contact with more investors and expand financing channels.
The use of funds raised by issuing bonds is relatively flexible, and enterprises can make reasonable arrangements according to their own business and development needs, such as expanding production scale, researching and developing new products, and repaying bank loans.
Issuing bonds can increase the debt scale of enterprises and reduce the proportion of equity financing, thus optimizing the capital structure of enterprises, improving the financial leverage effect of enterprises and enhancing their profitability.
In addition to the above advantages, there are also some risks and restrictions in issuing bonds, such as market risk, interest rate risk and liquidity risk. Therefore, when enterprises decide whether to issue bonds for financing, they need to fully consider their own operating conditions, financial conditions and market environment, and formulate reasonable financing strategies.
Bond market is the place where bonds are issued and traded, which is usually divided into exchange market, inter-bank market and counter market. Enterprises that issue bonds can choose to issue bonds in the exchange market or the inter-bank market, in which bond trading in the exchange market is more active, while the participants in the inter-bank market are mainly financial institutions and large enterprises.
According to the different characteristics of issuers, maturities and interest rates, bonds can be divided into many types. For example, bonds can be divided into government bonds, financial bonds and corporate bonds according to different issuers; According to different maturities, bonds can be divided into short-term bonds, medium-term bonds and long-term bonds; According to different interest rates, bonds can be divided into fixed-rate bonds, floating rate notes and zero coupon bond.
In order to assess the risk of issuing bonds, independent rating agencies will rate bonds. The rating results will be made public to investors to help them judge the investment value of bonds. Generally, the higher the rating, the lower the risk of bonds and the more confident investors are.
In the bond market, investors can trade bonds through securities companies and other institutions. Trading methods include spot trading, repurchase trading and futures trading. Spot trading refers to buying and selling bonds directly, repurchase trading refers to obtaining funds by pledging bonds and repurchasing bonds after the agreed time limit, and futures trading refers to buying and selling futures contracts.
In a word, issuing bonds is one of the important ways for enterprises to raise funds, which has many advantages. However, when enterprises choose to issue bonds, they need to fully consider their own situation and market environment and formulate reasonable strategies to give full play to their advantages and reduce risks.