FAQ (frequently asked questions)

Issuing bonds allows a company to access a broader range of investors and offers more flexible terms than traditional bank loans, which often require high collateral. Bonds also reduce dependence on a single financing source.

The risk depends on the company’s financial health, industry stability, and quality of management. Corporate bonds typically offer higher yields than government bonds but come with increased risk. All relevant details are usually disclosed in the issuance prospectus.

A higher interest rate reflects the added risk of corporate bonds compared to government bonds. It’s also a competitive offer to attract investors in less mature capital markets. The rate is often justified by the company’s growth potential.

Convertible bonds give investors the option to convert their debt into company shares at a predetermined price. This reduces risk and increases long-term potential returns, making them attractive to both companies and investors.

Companies issuing bonds must publish a detailed prospectus and regular financial reports. These documents provide investors with insights into the company’s operations and the use of raised funds.

If the company defaults, investors may recover their funds through any collateral backing the bonds or legal actions, depending on the bond’s terms. The level of protection is detailed in the issuance prospectus.

The minimum investment varies but is often set between €500 and €5,000. This makes corporate bonds accessible to a range of investors, including retail buyers.

Interest, or coupon payments, are typically made semi-annually or annually, depending on the terms set in the prospectus.

Yes, most corporate bonds can be traded on the secondary market, allowing investors to sell their bonds before the maturity date. However, liquidity depends on market conditions.

Companies often use the capital for expansion, new projects, or refinancing existing debts. Details of fund allocation are outlined in the prospectus.