chapter 5 Bond Market.pptVIP

Chapter 5 Bond Market Course Structure Part1 Bond Essence and Characteristics of Bonds Issuance of Bonds Types of Bonds Part2 Bond Market Functions of Bond Market Credit Rating of Bonds Negotiation of Bonds Preview The last chapter discussed short-term securities that trade in a market we call the money market. This chapter talks about the first of several securities that trade in market we call the capital market. Capital markets are for securities with an original maturity that is greater than one year. These securities include bonds, stocks, and mortgages(抵押贷款) .  How the capital markets operate will be discussed before launching into the study of bonds. Purpose of the Capital Market Firms that issue capital market securities and the investors who buy them have very different motivations than those who operate in the money markets. The primary reason that individuals and firms choose to borrow long-term is to reduce the risk that interest rates will rise before they pay off their debt. This reduction in risk comes at a cost, however. 个人与企业选择举借长期债务的主要原因是为了降低债务清偿前利率上升的风险。然而，这种风险的降低也需承担一定的成本，由于风险溢价，在大多数情形下，长期利率高于短期利率。 Who Participates in the Capital Market The primary issuers of capital market securities are federal and local governments, corporations and individuals/households. The federal government issues long-term notes and bonds to fund the national debt. State and municipal governments also issue long-term notes and bonds to finance capital projects, such as school and public hospital construction. Who Participates in the Capital Market Corporations issue both bonds and stock. One of the most difficult decisions a firm faces can be whether it should finance its growth with debt or equity. The distribution of a firm’s capital between debt and equity is its capital structure. 企业面临的最困难的决策之一就是应以债务还是权益资本为企业的成长融资。而这在公司资本中的分布比例就是公司的资本结构。 Who Participates in the Capital Market Corporations may enter the capital markets because they do not have sufficient c