ISSUERS OF BONDS
| GOVERNMENT BONDS – Government treasuries are a major source of Government funding and are issued to the market via auctions in the primary market. Government bonds once purchased can then be traded in the secondary market often changing hands many times before maturity. It is in this secondary market that most trading occurs. Government bonds have maturity dates and are normally classed into three categories: Bills – Debt securities maturing in less than 1 year Notes – Debt securities maturing in 1-10 years Bonds – Debt securities maturing in 10 years+ Government bonds are probably the most liquid type but are also regarded as safe debt, however there is risk involved with developing countries which have been known to default. The main Government issued bonds to watch are the U.S, U.K, Germany, France, and Japan. Government bonds also include municipal bonds these are bonds issued by states, cities, counties, or districts to raise money to finance their own operations, or pay for projects such as schools, hospitals or power plants etc… |
| CORPORATIONS – Corporations can issue bonds just as it can issue stock, although corporate bonds tend to be of higher risk than Government bonds because companies tend to have larger potential to default. Due to the higher risk element they can be the most rewarding fixed income investment tools that investors can utilize within the bond markets, making it a very large and liquid market with an estimated average of $15 billion daily trading volume. Like government bonds corporate bonds are divided into three groups: Short-term notes maturities of 1-4 years Medium term notes/bonds maturities of 5-12 years Long-term bonds maturities of 12+ Variations of corporate bonds include: Convertible – holder can convert to stock on specified date Callable – company can redeem issue prior to maturity Puttable – investor can sell back to issuer prior to maturity |
| Financial Organizations |
| Individuals (Very Small) |
| Local Governments |
| Supranational Organizations |