Bonds are creditor's rights and debt certificates that the government, financial institutions, industrial and commercial enterprises and other institutions want to issue to investors when they directly borrow money from the society to raise funds, and promise to pay interest at a certain interest rate and repay the principal according to agreed conditions. When an investor buys a bond, it is equivalent to lending money to the issuer. At the same time, the issuer promises to repay the principal and interest on schedule on the maturity date of the bond. Before the maturity of bonds, investors usually charge interest regularly, so bonds are also regarded as fixed-income investment products.
Although the types of bonds are different, the main elements are basically the same:
1. maturity date of bonds. Bonds, like all loans, usually have a fixed repayment date (there are perpetual bonds abroad, that is, they only pay interest every period and never repay the principal, but they have not appeared in China). The maturity date of a bond determines when the bondholder can get the principal.
2. The face value of the bonds. The face value of bonds, referred to as face value for short, refers to the face value set when bonds are issued, and it is also the principal amount that bondholders can get after maturity. Generally speaking, bonds issued in China have a face value of 65,438+000 yuan each. After the bond is issued, it will be traded in the secondary market, and its price may fluctuate, but no matter what price the bond is bought at, its face value at maturity shall prevail.
3. The price of bonds. Due to the change of supply and demand and interest rate in the capital market, the bond market is not necessarily equal to its face value, nor is it fixed, and the price often deviates from its face value. At the same time, the price of bonds is also directly related to the market interest rate.
4. coupon rate of bonds. The coupon rate of bonds refers to the ratio of bond interest to the face value of bonds, which is the calculation standard of the remuneration that the issuer promises to pay to bondholders in a certain period of time. The determination of bond coupon rate is mainly influenced by the bank interest rate, the issuer's credit status, the repayment period and interest calculation method, and the capital supply and demand in the capital market at that time. It is worth noting that coupon rate closely calculates the proportion of interest, rather than the actual interest rate for investors to buy and hold bonds due.
5. Bond issuer. The name of the issuer indicates the debt subject of the bond, which provides the basis for the creditor to recover the principal and interest at maturity.