How to Issue Bonds to Raise Capital

A private placement bond issued with principal protection typically offers investors 100% principal protection, if held to maturity and the issuer is able to fulfill its obligation.
When this type of bond is issued with principal protection, a certain percentage of the principal is used to purchase a zero-coupon bond with a maturity matching that of the bond, which matures to the value of the original principal. It is this purchase of a zero-coupon bond that protects, or hedges, the principal and, because it remains in place throughout the term of the bond, it is a static hedge. The remaining funds are then used by the company/issuer to make a leveraged investment in their project, trading portfolios or other risky opportunities utilizing credit lines, standby letters of credit, margin, etc.
How to Issue Bonds to Raise Capital
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Start your own Proprietary Trading firm franknagyfinan...
The Ultimate Prop Firm Guide and Hedge Fund Guide. E-book COMBO
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