Comparative characteristics of stocks and bonds - abstract. Issuing bonds is a way to attract borrowed funds without losing control over management. Disadvantages of corporate bonds

Bonds are an important object of trading on the securities market. A bond is a security that certifies the loan relationship between its owner (lender) and the person who issued it (borrower).

A bond is “an issue-grade security that secures the right of its holder to receive from the issuer of the bond, within the period specified by it, its nominal value and the percentage of this value fixed in it or other property equivalent.”

Thus, a bond is a certificate of debt, which certainly includes two main elements:

• - the issuer’s obligation to return to the bondholder after the agreed period the amount indicated on the title (front side) of the bond;
• - the issuer’s obligation to pay the bondholder a fixed income in the form of a percentage of the face value or other property equivalent.

The fundamental difference between stocks and bonds is this. By purchasing a share, an investor becomes one of the owners of the issuing company. By purchasing a bond of the issuing company, the investor becomes its creditor. In addition, unlike shares, bonds have a limited circulation period, after which they are redeemed. Bonds have an advantage over shares in the exercise of the property rights of their owners. Interest on bonds is paid first, followed by dividends. When dividing the property of the issuing company in the event of its liquidation, shareholders can rely only on that part of the property that will remain after the payment of all debts, including bond issues. If shares, being a title of ownership, give their owners the right to participate in the management of the issuing company, then bonds, being a loan instrument, do not give such a right.

The issue of bonds contains a number of attractive features for the issuing company: through their placement, a business organization can mobilize additional resources without the threat of interference from their creditor holders in the management of the financial and economic activities of the borrower. However, bonded loans of companies should be considered as an addition to borrowed funds received in the form of bank loans. Even in countries with a developed stock market, companies do not cover all their needs by issuing bonds. borrowed funds Oh. Since a bond loan expresses relations regarding the return movement of the loaned value, it is similar in essence and purpose to a bank loan. In this regard, it should be noted that the right to issue bonds can only be granted to companies that meet the creditworthiness requirement.

The Ministry of Finance of the Republic of Belarus on behalf of the government has the right to issue the following types of government securities:

• - government short-term bonds (GKOs);
• - government long-term bonds (GDO);
• - government bonds denominated in foreign currency;
• - bonds of the state winning foreign currency loan of the Republic of Belarus (for individuals);
• - bonds of the state savings loan of the Republic of Belarus (for individuals).

When issuing bonds by joint stock companies, the following additional conditions must be met:

• - the nominal value of all bonds issued by the company must not exceed the size of the company’s authorized capital or the amount of security provided to the company by third parties for the purposes of the issue;
• - the issue of bonds is allowed after full payment of the authorized capital;
• - the issue of bonds without collateral is allowed in the third year of the company’s existence and subject to proper approval by this time of the company’s two annual balance sheets;
• - the company does not have the right to place bonds convertible into shares of the company if the number of declared shares of the company is less than the number of shares, the right to purchase, which the bonds provide.

To summarize what was said above about a bond, we can think of a bond as:

• - debt obligation of the issuer;
• - source of financing budget expenditures exceeding income;
• - source of financing investments of joint-stock companies;
• - a form of saving money and generating income.

Bond- a debt security that reflects the loan relationship between the investor (lender) and the issuer (borrower). Simply put, a bond is a debt. By issuing bonds, a company borrows money and agrees to return it to the bondholder over time with interest. For a company, this is one of the ways to raise money for its development.

Main properties of bonds:

• The presence of a final validity period of the bond. When issuing bonds, the issuer specifies a maturity date—that is, the date on which the company buys the bonds back from investors by paying them the face value of the bond. Most often, bonds are issued for a period of several months to a year (short-term), from 1 to 5 years (medium-term), from 5 years or more (long-term).
• Payment of interest on bonds is the responsibility of the issuer. This is the fundamental difference between bonds and stocks. If the company is not obliged to pay dividends on shares, and pays them on the recommendation of the board of directors, and the decision on payment is made by the meeting of shareholders, then the payment of interest on bonds is the responsibility of the company. If a company does not pay interest when due, it is called a default. In which case, bondholders can demand payment of interest through the court. The issuer determines the amount and frequency of payments when issuing bonds. The yield is expressed as a percentage of the bond's face value and shows the annual yield.
• In the event of liquidation of a company, bondholders have priority in payment, since first of all the company pays off with all creditors, which include bondholders. Typically, liquidation occurs when a company goes bankrupt. If the company does not have enough funds to pay all creditors, then the property is sold. Settlements with shareholders occur after all obligations have been repaid, and it may turn out that the shareholders ultimately receive nothing.
• Bondholders, being creditors of the company, do not participate in its management.

Characteristics of bonds.

Bond face value- this is the price at which the bond will be redeemed (purchased by the issuer from the investor) at the end of its term. Most bonds are issued with a par value of 1000 rubles.

Maturity date- the date on which the bond will be repaid. There is also an offer - sometimes the issuer can set an offer date, this is when he can buy the bond from the investor before the maturity date. An investor can submit a bond for an offer.

Market price— on the market, the price of a bond may differ from the par value and be more or less than the par value. The bond price is expressed as a percentage of the par value, 100% - the price corresponds to the par value of 1000 rubles, 101% - the price is 1% higher than the par value, the price is 1010 rubles. In the market, the price of a bond fluctuates depending on market conditions, interest rates, supply and demand. Typically the fluctuation range is 95-105% of the nominal value. But if there is a risk of non-payment of the coupon, then the price may fall even more. The closer the maturity date, the closer the bond price is to par.

Coupon- This is the money that the issuer periodically pays on the bond. The coupon rate is expressed as a percentage per annum and shows the bond's annual coupon yield relative to its par value. For example, the face value of a bond is 1000 rubles, the coupon is 10%, payment is made twice a year. This means that the investor will receive an income of 100 rubles in two payments of 50 rubles.

Types of bonds.

According to the method of generating income, bonds are divided into:

• coupon
• zero-coupon (discount)

By coupon bond The issuer pays cash (coupon) at regular intervals. Payments on bonds can be made once a year, once every six months, once a quarter - this is the coupon period. Coupon income is accrued every day, but is paid only on the coupon payment date, which is known in advance. The money usually arrives in your account 2-3 days after the coupon payment date.

The amount of coupon income that has accumulated during the coupon period but has not yet been paid is called accumulated coupon income (ACI). After the coupon is paid, the tax accrual is reset to zero and begins to accumulate again.

If you buy a bond, you must pay the seller the NKD that has accumulated by the day of the transaction, thereby compensating him for the lost income (since he loses the coupon upon sale). If you sell a bond, the buyer pays the IRA to you.

The bond coupon can be fixed or variable. For a bond with a fixed coupon, the coupon amount is constant for the entire payment period; for a bond with a variable coupon, the amount may change.

The value of the variable coupon is tied to some base interest rate, for example the LIBOR rate (the rate on the international interbank loan market) or the refinancing rate, and is set as base rate+ some other percentage (surcharge). Since the base rate may change over time, the coupon size will also change. For example, the coupon value is calculated as the base rate + 2 percentage points. In the first year the base rate is 3%, which means the coupon size is 3+2=5%, in the second year 3.5+2=5.5%.

By discount bonds no coupon is paid, the investor receives income due to the fact that the bond is sold below its face value (at a discount). For example, a company sells a bond with a par value of 1000 rubles for 900. Due to the difference between the sale price and the redemption price, the investor receives income.

According to the collateral method, bonds are divided into:

• secured (mortgages) - to increase the reliability and attractiveness of its securities, a company can issue secured bonds, payments on which are guaranteed by some assets. The collateral can be real estate (mortgage obligations), property, loans, securities and other assets. In the event of bankruptcy, these assets can be sold and used to pay off bond obligations.
• unsecured (mortgage-free) — unsecured bonds are not backed by any assets, and the guarantee of payments depends only on the overall solvency of the company.

According to the status of the issuer, bonds are divided into:

• state - issued by the government, in Russia government bonds are called OFZ () and are issued by the Ministry of Finance, in the USA these are treasury bonds or treasuries
• municipal - issued by local (regional) authorities, for example bonds of the Moscow region
• corporate - issued by commercial companies, for example Sberbank bonds

According to the type of repayment, bonds are divided into:

• early redeemable - for such bonds the issuer has the opportunity to redeem them early before the maturity date
  • revocable - right early repayment bonds are owned by the issuer
  • returnable - the right to present the bond for redemption early belongs to the investor
  • amortizing - the issuer gradually pays its face value in installments during the bond's circulation period in order to reduce the amount of payments at maturity
• irrevocable - bonds are redeemed once on a set date

According to convertibility, bonds are divided into:

• convertible - the investor has the right to exchange bonds for a certain number of shares or other bonds of the same issuer
• non-convertible

According to indexation of payments, bonds are divided into:

• indexed - the amount of payments is adjusted depending on changes in some indicator, for example the inflation rate
• non-indexable

Separate group - income bonds. On income bonds, a company has the right to pay interest income only if it makes a profit. Income bonds are divided into:

• simple - the company is not obliged to reimburse unpaid income in the future
• cumulative - unpaid income accumulates and the company will be obliged to pay it in the future

If a company issues bonds abroad, they are divided into:

• foreign bonds - issued on the market of another country in the currency of that country
• Eurobonds - placed simultaneously on the markets of several European countries and also in foreign currency

Find out the par value, market price, coupon rate, maturity date and other parameters of bonds traded on Russian market, available on the websites of the Moscow Exchange, Rusbonds.ru, RBC.

Bonds have lower volatility than stocks and are most often used as a conservative part of an investment portfolio. Coupon bonds provide a stable cash flow. Some investors use bonds as a temporary home for their money while they wait for profitable deals in stocks.

Main risks of bonds.

Interest rate risk.

Interest rates in the financial market reflect the cost of money. Depending on economic situation interest rates change over time. In this regard, the issuer and investor bear interest rate risks on bonds. The risk is as follows. If a bond is issued with a fixed coupon income, then if rates rise, the investor will receive less income, since he receives income from the bond that is lower than current interest rates on the market. For example, an investor bought a bond with an 8% interest rate, which corresponded to the average market rate at that time. A year later, market rates rose to 10%, and the investor still received 8%. The difference of 2% is potential lost profit.

For the issuer, the risk lies in a decrease in interest rates - if bonds are issued with a coupon of 8%, and market rates have dropped to 5%, then the issuer is still forced to pay 8%, that is, borrowed money costs him more than now.

To avoid such risks, the issuer issues bonds with variable coupon income or with the right of early repayment.

Default risk— the risk that the issuer will not be able to fulfill its debt obligations. Some bond issues are assigned credit ratings, which can be used to judge the reliability of the bonds. Usually, if the risk of default is high, this can be seen in the bond's yield to maturity - it is noticeably higher than the market average.

Inflation risk— the risk that inflation will rise and exceed bond yields. Then the real return (return minus inflation) will be negative. For example, the yield of a bond is 10%, and inflation for the year was 12%, then the real yield is -2%, that is, in real terms, investments in bonds have depreciated by 2%. The income on bonds is fixed, so if inflation rises, the investor will either have to suffer losses or transfer from bonds to some other, more profitable instrument.

Taxation of bonds

Individual income from bonds is taxed at 13%. Tax is paid on coupon income and on income from the sale of bonds. The tax on coupons is paid by the issuer himself, that is, the money comes to your account “clean”. Tax on sales income is collected by your broker by debiting your account at the beginning of the year or when you withdraw funds.

The tax base for the sale of bonds is calculated as follows:

(Income from sale + ANC received) – (Purchase expenses + ANC paid) + Coupon income

Tax base for redemption of bonds:

Bond par value – (Purchase expenses + ANC paid) + Coupon income

Conditional example: bought a bond at a price of 99% - 990 rubles, the income tax at the time of purchase is 5 rubles, which means the cost of purchase is 990 + 5 = 995. Coupon 40 rubles. After some time, they sold it at a price of 99.5% - 995 rubles, NKD 10 rubles, which means the income from the sale is 995 + 10 = 1005. Income 1005-995=10 rubles. Tax = 10 * 0.13 = 1.3 rubles. The tax on the coupon is 40 * 0.13 = 5.2 rubles, that is, not 40 rubles, but 34.8 rubles will be credited to the account. The tax on coupon income is withheld immediately upon receipt of income into the account. The broker will withhold tax on income from operations at the beginning of the next year or when withdrawing funds from the account.

The tax base is reduced by the amounts of actually incurred and documented expenses associated with the acquisition, storage, sale and redemption of securities.

The following income of individuals from transactions with securities is not taxed:

• coupon income on government interest-bearing bonds (OFZ) for the period of ownership of the security by an individual;
• coupon income on interest-bearing bonds of constituent entities of the Russian Federation and local governments.

Companies are one of the types of debt obligations that are not covered (not secured by collateral). Claims from asset holders will be considered in a general manner, taking into account the current requirements of other lenders. In essence, unsecured bonds have a certain security - the solvency of the enterprise.

Unsecured company bonds: essence and place in qualification

Bonds are debt securities that come in several types based on the type of security:

1. Secured bonds- one of the most popular assets. Any property (can be movable or immovable) acts as collateral. This class of bonds has several subtypes (depending on the type of collateral):

- debt securities that are secured by mortgages on real estate. This type of asset appeared at the beginning of the last century. The reason for its popularity was the increase in production assets and their use by companies as collateral. In Russia, this approach was typical for metallurgy and railways. Subsequently, investors realized that real estate does not allow them to fully insure themselves against risks in the event of bankruptcy, because selling property is a complex and costly process. As a result, many companies stopped issuing bonds with such collateral. By the way, debt securities of this type can still be found in the USA - they are used in the electricity supply and gas industries;

- debt securities with equipment as collateral. The main purpose of the papers is to help companies update their existing equipment, which acts as collateral. The issuer does not receive resources until it fully pays off what is already available on the bonds;

- debt securities secured by securities. Here, the role of collateral is played by the company issuing the bonds. The price of assets should be about a third higher than the existing debt. In practice, such debt securities are almost never used;

- bonds, the security of which is a pool of mortgage loans. Already issued mortgage loans act as collateral here. The process is quite simple. The company issues a loan against real estate and then issues debt securities. Securing the latter - loan payments;

Bonds backed by assets. This type of debt paper is one example of debt securitization. The collateral is the flow of financial payments, usually for loans. The point is simple. Credit companies issue loans. After that, they are combined into a pool and form a trust. This fund issues bonds, the security of which is issued loans.

2. Unsecured company bonds- type of debt assets (right of claim) that do not require collateral. If the issuer is unable to pay its obligations (bonds), its property is not seized. Essentially, the lender has an extra layer of protection against trouble.

As a rule, they can afford to issue unsecured bonds large companies who are solvent and inspire confidence among potential investors (buyers of securities). In addition, in a number of sectors of the economy there are no assets that could act as collateral. So many companies are forced to issue these debt assets.

Unsecured bonds of companies be:

Subordinated. The peculiarity of such assets is their priority in covering debt in the event of liquidation (bankruptcy) of the enterprise that issued the bonds. If such a situation occurs, then the owners of subordinated bonds can count on payments only after the debts to the holders of the main assets are covered. As a result, buyers of subordinated debt securities are much less protected from negative scenarios;

Guaranteed. A special feature of such assets is the presence of an additional guarantee of timely payment of obligations (except for the main issuing company). The guarantor undertakes to make the necessary payments if the main issuer is unable to do so.

This type of bonds is most popular when issuing debt securities by subsidiaries, when the main office (parent office) acts as a guarantor. In some cases, the issue of debt securities may be guaranteed by a group of guarantors;

- insured. Here, the role of guarantor is played by the company, which, in the event of financial problems with the issuer, makes the necessary payments.

Unsecured bonds of companies: features, legal restrictions, rights of holders

Unsecured bonds- debt obligations of the company that are not backed by any collateral. If the bondholder makes his claims (for example, in the event of bankruptcy of the issuer), then the debts will be covered only after the debts of other creditors are paid.

Despite the lack of material security, investors can count on some protection. As a rule, the main conditions are agreed upon when issuing bonds. One of the main “protective” conditions is the “negative pledge” clause. In this case, the company is prohibited from transferring the material assets of the enterprise as collateral to other organizations. As a result, investors receive the company's existing assets as collateral.

There may be situations when the prospectus for issuing debt bonds also mentions other clauses that ensure the safety of investments. Such conditions may include:

Obligations of the debtor to maintain an optimal ratio of personal and credit capital;
- a ban on issuing new debt securities until old assets are covered;
- making regular payments to a special fund that allows you to cover debts on already issued debt securities, and so on.

In a number of cases, start-up enterprises that have just started but show excellent rates of development also resort to issuing unsecured debt securities of companies. This decision can be explained by the lack of real assets capable of covering current liabilities.

The legislation of the Russian Federation also provides certain protection for holders of unsecured debt securities. In particular, the law provides for some restrictions on the issue of unsecured assets :

Issues can be made by companies that have been on the market for three years or more. As a result, investors have the opportunity to conduct analysis financial activities issuer and make an informed decision regarding future investments;

Issues are prohibited in amounts exceeding the authorized capital. At the same time, the release of unsecured assets can only be done after full payment of capital. If the company plans to issue bonds in an amount that is greater than the authorized capital, then a mandatory condition is the provision of third parties.

It is important to highlight a special category of unsecured debt securities - assets with a reduced status. This includes the obligations of companies that are inferior in rights to other holders of debt securities, that is, their claims will be taken into account and covered last. First, the issuer satisfies the requests of holders of other securities - bonds, ordinary and preferred shares. To attract potential investors, such assets must have higher returns compared to other instruments.

The peculiarity of bonds with a lower status is that already at the issue stage, options for combining such assets with simple debt securities without collateral are discussed. As a result, holders of higher grades of debt receive certain benefits.

The main features of unsecured bonds of companies include:

- no fixed collateral. In some cases, debt securities can be secured by a “floating” pledge, for example, a guarantee of third parties, intangible and tangible assets, long-term contracts, and so on. Such tools - great option to make long-term financial investments in a situation where the company does not have decent collateral (for example, real estate);

- unsecured bonds of companies are of lower quality than secured assets. As a result, they have a high rate of return. As a rule, no redemption fund is formed for such assets, and the company will only have to pay interest until the maturity date. This position determines the powerful impact of inflation on the price of investments;

- holders of unsecured debt securities (for “floating” collateral) are not allowed to confiscate secured funds (assets) if the issuer fails to fulfill obligations on the debt. On the other hand, they may demand that the enterprise be liquidated in order to return the funds spent.

As for the basic rights of holders of unsecured debt assets, these include:

The right to information about the terms of the loan and the amount of total debt;
- the right to receive interest payments;
- the right to receive the total repayment amount (exercised within the established time frame).

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