Trustee of bondholders

A bondholder trustee is a person who acts as an intermediary between the company and bond buyers. This person is also allowed to monitor the actions of the company. This person is selected if the number of bond buyers is large and the bonds are sold publicly. If the sale of bonds is exclusive, only the buyer and the company are considered parties to the contract.

8- Interest rate

The percentage of interest that is given to the buyer is called interest rate. In the past, this rate was determined from the beginning and remained constant throughout the period; But currently, some bonds have a variable interest rate and are also dependent on the production and income of the company, in which case these bonds are called “floating rate bonds”. Where To Cash Savings Bonds?

Advantages and Disadvantages

All securities available in the market have many positive and negative points. In the same way, bonds also contain advantages and disadvantages that you will get to know about.

Benefits of buying bonds

Since the bonds are a loan to the company and the company is obliged to pay interest on the bondholders’ money on the dates that have been specified, the risk in case of financial problems of the company does not threaten the assets of the bondholders and they receive their interest. will do The dual nature of bonds allows the buyer to bear less loss in case of any problems or losses in the company. If the company goes bankrupt, the holders of these bonds will be the first in line to pay the company’s debts.

Disadvantages of buying bonds

The holders of these bonds, in fact, have the authority of lenders to the company and only receive the interest of the loan they gave; Therefore, they do not have any right to make decisions about the company and they do not have the right to vote. If the company’s stock price increases, there will be no change in the bond’s interest rate.

liquidity

After the maturity of the contract, equivalent to the nominal price of the bonds, cash is given to the bond holder. In addition, during the period of time specified in the contract, the profit of the purchase of bonds is also deposited into the buyer’s account in cash.

Buying bonds

Bonds can be bought like most securities through public announcements and subscriptions.

Who can buy bonds?

There is no specific limit for buyers and everyone can buy bonds as much as they can according to their budget.

How to receive interest

The interest rate and its payment date are made according to the agreement written in the text of the contract between the buyer and the bond issuer.

Learn a little more about bonds

The important thing about bonds is that these bonds do not comply with the Islamic banking system due to their nature, which is a type of loan with interest, and these bonds cannot be bought and sold in Iran. In addition, the borrower or the issuer of the bonds is not required to provide an explanation about the cases for which the buyers’ capital is spent, and can enter their capital in any field. Although the scope of the companies’ activities is clear, some bond issuers use the property of buyers in illegal activities.