35 years: Debt capital markets
Perpetual bonds mean that investors will never receive their principal back and issuers will always pay interest. In this video Tim delves into the details of perpetuals and the potential benefits to investors and issuers.
Perpetual bonds mean that investors will never receive their principal back and issuers will always pay interest. In this video Tim delves into the details of perpetuals and the potential benefits to investors and issuers.
12 mins 36 secs
Perpetual bonds are hybrid debt instruments that possess similarities with bonds and equity. The key feature of a perpetual bond is that there is no maturity date. The benefit of issuing a perpetual bond for a company is that it lowers their debt leverage. For an investor, it often offers a higher yield than other forms of debt on the market.
Key learning objectives:
Define a perpetual bond
Explain the purpose of a perpetual bond
Identify the risk of investing in a perpetual bond
Outline the benefits of a perpetual bond on behalf of the issuer and the investor
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