Zulfiqar Hasan

In finance, bonds are long-term debt instruments sold by a company or government to raise money. It is a long-term promissory note.

A Bond is an instrument which pays fixed amounts (usually) of interest (called a coupon) on a regular basis, over its life and is redeemed at par value (usually) at maturity, by the issuer .

Reasons for Issuing Bonds:

  1. To raise capital for their business for investments
  2. To Reduce the Cost of Capital
  3. To Effect Tax Saving
  4. Long-Term Financing
  5. Avoid long-term financing from banks
  6. Efficiency of management
  7. Lower interest payments
  8. No Dilution of Stockholder's Equity
  9. Call options by the company
  10. Convertibility options by the company

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