Sell debt on the open market
Bonds are fixed-income securities, issued by companies to raise capital for investments. The interest paid is fixed at the time the bond is offered for sale. They can be short-term (less than a year) or long-term (up to 30 years or even more). Generally speaking, the longer the term, the higher the interest rate the issuing company has to offer.
There are several reasons why a company might issue bonds:
- They do not dilute the value of the company’s shares, which would happen if additional shares were to be issued;
- They require fewer covenants than bank loans do;
- They have a large investor base, as bonds are perceived by investors as less risky than more volatile investments.
Issuing a bond is a complicated process and requires advice on the marketplace, the possible issue price and the documents needed for filing.
BNP Paribas Fortis helps you set the terms of the bond and underwrites the sale by buying the issue or by taking the lead in forming and managing a syndicate. In cooperation with other financial institutions, we then offer the bond for sale on the financial market.