A prospectus is the offering document filed with the SEC by a company that issues bonds for sale to the public in a registered transaction.

If the company defaults, holders of secured bonds will have a legal right to foreclose on the collateral to satisfy their claims. When it comes to international market, a secured corporate debt instrument is known as a corporate bond, but in the case of the unsecured debt instrument, it is known as a corporate debenture.

You can use these reports to learn about and monitor a company's financial condition. Bond investments may be worth more or less than the original cost when redeemed. For more educational information, visit the SEC's website for individual investors at www.investor.gov. Investment management products and services offered by PIMCO Japan Ltd are offered only to persons within its respective jurisdiction, and are not available to persons where provision of such products or services is unauthorized. Non-investment grade bonds, which are also called high-yield or speculative bonds, generally offer higher interest rates to compensate investors for greater risk. CH-020.4.038.582-2LEI: 549300GHCCJWKY72R127. Stock Terminology. Thus, what is financially advantageous to the company is likely to be financially disadvantageous to the bondholder. A corporation is treated as a “person” with most of the rights and obligations of a real person.

Like the U.S. government, corporations issue bonds to raise money. Broker-dealer background checks can help investors avoid fraud. The stockholder wishing to transfer (sell) stock does not require the approval of the other stockholders to sell the stock.

Companies that have sold bonds in a public offering file quarterly reports on Form 10-Q and annual reports on Form 10-K, among other filings. For more on bonds in general, visit FINRA's Smart Bond Investing at www.finra.org/Investors/InvestmentChoices/Bonds/smartBondInvesting/Introduction/. For example, imagine one bond that has a coupon rate of 2% while another bond has a coupon rate of 4%. As shown above, a bond's yield also moves inversely with the bond's price. Investors can reduce their risks by diversifying their assets. Instead, the bond makes a single payment at maturity that is higher than the initial purchase price. Particularly in a public company, the stock can be easily transferred in part or total at the discretion of the stockholder. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Therefore, corporations may own property, enter into binding contracts, borrow money, sue and be sued, and pay taxes. Corporate debt securities are subject to the risk of the issuer’s inability to meet principal and interest payments on the obligation and may also be subject to price volatility due to factors such as interest rate sensitivity, market perception of the creditworthiness of the issuer and general market liquidity.

Credit rating agencies assign credit ratings based on their evaluation of the risk that the company may default on its bonds. While valuations have risen from their March lows, dislocation has created compelling opportunities in both the public and private credit markets. The corporation is considered a separate legal entity, conducting business in its own name. CH-020.4.038.582-2), Brandschenkestrasse 41, 8002 Zurich, Switzerland, Tel: + 41 44 512 49 10. These are called zero-coupon bonds, because they make no coupon payments. The terms of some bonds give the company the right to buy back the bond before the maturity date. Previous In addition, the bond will make a principal payment of $1,000 at the end of the 10 years. With inflation over time, the amount of money received on the bond's interest and principal payments will purchase fewer goods and services than before. Before sharing sensitive information, make sure you’re on a federal government site. | PIMCO Europe Ltd (Company No. You can also find a bond fund's prospectus at the bond fund's website. A bond's maturity and coupon rate generally affect its sensitivity to changes in market interest rates. | PIMCO Deutschland GmbH (Company No. In India, corporate debt instruments are termed as debentures. The corporate bond contract (called an indenture) often includes terms called covenants designed to limit credit risk. This communication is provided for general information only without taking into account the objectives, financial situation or needs of any particular investors. The protracted low-yield environment has left many investors with insufficient returns to meet their goals: how can credit help? Bonds and the companies that issue them are also classified according to their credit quality.

If two bonds offer different coupon rates while all of their other characteristics are the same, the bond with the lower coupon rate will generally be more sensitive to changes in market interest rates. www.investor.gov/researching-managing-investments/researching-investments/using-edgar-researching-public-companies. Borrowing costs and lending standards are indicators of credit conditions, Differences in yields between various credit sectors and government bonds of similar maturities. | PIMCO (Schweiz) GmbH (registered in Switzerland, Company No. This is known as calling the bond, and it represents "call risk" to bondholders. The yield to maturity for any new buyer, however, will rise as the price falls. Corporate bond issuers with lower credit ratings tend to pay higher interest rates on their corporate bonds. But if the company runs into financial difficulties, it still has a legal obligation to make timely payments of interest and principal. When companies want to expand operations or fund new business ventures, they often turn to the corporate bond market to borrow money. Are you sure you want to remove #bookConfirmation# from your Reading List will also remove any The longer the bond's maturity, the more time there is for rates to change and, as a result, affect the price of the bond. (iv) confirm and agree to be bound by the statement that, if applicable, that you are authorised to accept these Terms and use or access (or attempt to useor access) this Website on behalf of your employer, your client, or both, and that in doing so you are acting within the scope of your duties and, at all times, on behalf of your employer, your client or both. Bond characteristics are important because they outline the conditions of the investment and the payment and interest terms. https://

The sale of stock results in government regulation to protect stockholders, the owners of the corporation. It's important to keep in mind that despite swings in trading price with a bond investment, if you hold the bond until maturity, the bond will continue to pay the stated rate of interest as well as its face value upon maturity, subject to default risk. This presents investors with interest rate risk, which is common to all bonds, even U.S. Treasury bonds. Investors should base their decisions on their individual circumstances. Bonds can be classified according to their maturity, which is the date when the company has to pay back the principal to investors. 24-28, 60439 Frankfurt am Main) in Germany in accordance with Section 32 of the German Banking Act (KWG). Common Bond Characteristics. Characteristics of a Bond A bond is generally a form of debt which the investors pay to the issuers for a defined time frame.

Corporate Bond Characteristics. Other components include U.S. Treasury bonds, other U.S. government bonds, and municipal bonds. For example, an investor may pay $800 to purchase a five-year, zero-coupon bond with a face value of $1,000. To understand bonds, it is helpful to compare them with stocks. “Fallen angel” is a term that describes an investment-grade company that has fallen on hard times and has subsequently had its debt downgraded to speculative grade. Face value. For "Using EDGAR - Researching Public Companies," visit www.investor.gov/researching-managing-investments/researching-investments/using-edgar-researching-public-companies.