| Author | Message | ||
     Kubang Celebrity Bewarse Username: Kubang Post Number: 40662 Registered: 09-2011 Posted From: 161.141.1.1 Rating: N/A |
originally they issued bonds at 5.3% coupon rate (yield) with an expiry date in 2020. that means if you bought those bonds whenever they issued, you will be getting 5.3% interest per year on those bonds until expiry in 2020 and then they will return your principle. however, once bonds are issued they will be listed and allowed to trade in the bond market; every big company does that. now the yield is over 8% for the same bonds, that means people who wants to own TSLA bonds want more returns because the default risk is high. that means people are willing to pay less than the face value of that bond to own it. for comparison if you have treasury bonds for same duration which are ultra safe because of govt backing, yield would be less than 2%. higher the credit rating of the company, safer the bonds/debt issued by company so the yields will be lower. risky companies ki junk bond status (not investment grade) vuntundi, so yield would be higher. Ignorance is bliss |