Issuance of financial instruments

What are bonds?

Bonds are securities issued trough which an issuer borrows, publicly or privately to finance certain activities or projects (expanding their work force, buying real estate, marketing, etc). The bond issuer may be a private or public company in Romania, Limited liability companies (S.R.L) cannot issue bonds in Romania.

The equivalent value of the bonds is repaid by the issuer either at their maturity, in tranches or they can be converted into shares (convertible bonds). Depending on which option in chosen within the Terms & Conditions of the bond, the issuer is obliged to pay out an amount representing the equivalent value of the subscribed bonds (principal) or any interest.

Unlike the issuance of shares (which can be considered another form of financing0, the issuance of bonds is the preferred tool of entrepreneurs and companies, given that this process does not dilute the company’s shareholders.

Advantages of issuing Bonds

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What are Structured Products?

Structured products are pre-packaged investments that normally include assets linked to interest plus one or more derivatives. They are generally tied to an index or basket of securities and are designed to facilitate highly customized risk-return objectives. This is accomplished by taking a traditional security such as a conventional investment-grade bond and replacing the usual payment features—periodic coupons and final principal—with non-traditional payoffs derived from the performance of one or more underlying assets rather than the issuer’s own cash flow.

Advantages of issuing Structured Products