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NAME             ROLL NO.

Bhavik Parmar    28
Sonu Pethani     32
Harsh Sanghavi   34
Shashank Pai     26
Vaishali Rawal   36
Dharmik Patel    30

                            3
WHAT IS BOND MARKET ?


The bond market is a financial market where participants buy and sell
debt securities , usually in the form of bonds.
The bond market primarily includes:-
 I) Government-issued securities.
 II) Corporate debt securities.




                                                                        4
MEANING OF 'INTERNATIONAL BOND'
A bond issued in a country or currency other than that of the investor or
broker. They include Eurobonds, which are issued in a foreign currency,
foreign bonds, which are issued by a foreign government or corporation in
the domestic market, and global bonds, which are issued in both domestic
and international markets.



 INTERNATIONAL BOND IS FURTHER CLASSIFIED
             IN THREE TYPES
1)    Domestic Bond
2)    Euro Bond
3)    Foreign Bond
FEATURES OF INTERNATIONAL BOND

1)   It is a debt market


2) It is a fund raising market


3)   Fixed income instrument


4) Issued in foreign currency


5) It channelizing savings
THE COMMON PROCESS OF ISSUING BOND
Step 1:-A borrower will contact an investment banker.


Step 2:- The lead manager will invite other banks.


Step 3:-The managing group and banks will serve as underwriters for the
        underwriter issues.


Step 4:-The various members of the underwriting syndicate receive a
        portion of the spread.


Step 5:-The lead manager receives the full spread.
INSTRUMENTS OF
        INTERNATIONAL BOND MARKET
1)   Straight Fixed-Rate


2) Floating-Rate Note


3)   Convertible Bond


4) Straight Fixed-rate with equity warrants


5) Zero coupon bond


6) Dual-Currency bond
RISK OF INVESTING IN BOND
1)   Inflation Risk


2)   Interest Rate Risk


3)   Default Risk


4)   Downgrade Risk


5)   Liquidity Risk


6)   Reinvestment Risk


7)   Rip-off Risk
ADVANTAGES & DISADVANTAGES
   OF INTERNATIONAL BOND

             Advantages                     Disadvantages


Diversify your portfolio          Outperformed by Mutual Funds


International fund raising         Fees
instrument

                                   Risk
Fixed income market

                                   Limited Selection
Investment avenue(short term as
well as long term)
CHARACTERISTICS OF INTERNATIONAL
   BOND MARKET INSTRUMENTS
Instruments            Frequency of         Size of Interest   Pay off at
                       Interest payment     payment            Maturity
Straight Fixed-Rate    Annual               Fixed              Currency of issue

Floating-Rate Note     Quarterly or Semi-   Variable           Currency of issue
                       annual
Convertible Bond       Annual               Fixed              Currency of issue or
                                                               conversion to equity
                                                               share
Straight Fixed-rate    Annual               Fixed              Currency of issue
with equity warrants                                           plus equity shares
                                                               from exercised
                                                               warrants
Zero coupon bond       None                 Zero               Currency of issue

Dual-Currency bond     Annual               Fixed              Dual currency

                                                                                      11
INTERNATIONAL BOND AMOUNTS
OUTSTANDING BY MAJOR INSTRUMENTS

INSTRUMENTS                       Dec. 2008    Dec. 2009    March 2010

Straight fixed-rate                  14428.4     17274.2       17235.9

Floating-rate note                    7892.0       8357.2       7988.8

Straight fixed-rate with equity        396.7        447.2        446.1
warrants

Total                                22717.1     26078.6       25670.8

                                                                         12
INTERNATIONAL BOND AMOUNTS
        OUTSTANDING BY MAJOR ISSURES

ISSURES                       Dec. 2008    Dec. 2009    March 2010

Financial Institutions         17,925.70    20,030.10    19,531.10

Governments                     1,794.60     2,232.20     2,254.40

International Organizations       637.90       791.50       814.10

Corporate Issuers               2,359.00     3,024.70     3,071.20

Total                           22717.20    26078.50      25670.80
                                                                     13
INTERNATIONAL BOND AMOUNTS
OUTSTANDING BY MAJOR CURRENCIES
CURRENCIES       Dec. 2008   Dec. 2009 March 2010

Euro              10873.9     12387.6     11813.8

US Dollar          8215.1      9429.0      9718.1

Pound Sterling     1701.8      2145.5      2028.3

Yen                  746.7      693.9       668.7

Other               1179.7     1422.5      1441.9

Total             22717.2     26078.5     25670.8

                                                    14
WHAT IS DOMESTIC BOND
Bonds help acquire orders and, in many cases, are a precondition for
successful conclusion of a contract.
For all entrepreneurs planning to enter tenders and conclude
contracts for the delivery of goods or services we offer a wide range
of domestic contract bonds.


           MEANING OF DOMESTIC BOND
Bonds issued in the country and currency in which they are traded.
Unlike international bonds, domestic bonds are not subject
to currency risk. They usually carry less risk, as the regulatory and
taxation requirements are usually known to investors in domestic
bonds, or at least to their brokers and accountants.
TYPES OF DOMESTIC BOND

Public Sector Undertaking Bonds


Corporate Bonds


Financial Institutions and Banks


Emerging Bond Markets


Tax-Savings Bonds
WHAT IS EUROBOND ?

A euro bond is a debt contract between a borrower and an
investor, which records the borrower's obligation to pay interest
and the principal amount of the bond on specified dates.

For         -A firm issuing Yen bonds outside Japan . When a
Japanese firm issues yen bonds in the Euro market.
THE PROCEDURE FOR THE EUROBOND

1)   Select a Lead Manager:- The borrower chooses one investment bank
     to be the lead manager of the bond issue.


1)   Organize a Syndicate:- The lead manager negotiates with other banks
     to form managing group. This group then negotiates the terms of the
     bond issue with the borrower.


2) Selling the Bonds:-Once the syndicate is formed and the terms of the
   issue are agreed upon, the managing group buys the bonds from the
   borrower. The managing group then sells the euro bonds to the
   underwriters.


3)   Principal Paying Agent:-A agent or trustee may also be appointed by
     the borrower to handle the paperwork and legal aspects of the euro
     bond issue and act as principal agent.
UNIQUE CHARACTERISTICS OF
            EUROBOND


1) Coupon (The Interest Rate)
2) Maturity
3) Issuer
4) Secondary Market
5) Ratings
6) Taxation
7) A Eurobond is only for Medium and Long-term
ADVANTAGES & DISADVANTAGES FOR
 COMPANIES TO ISSUE EUROBONDS
            Advantages              Disadvantages
Large amounts             There are issue costs to take
                           into account.

Freedom and Flexibility

                           If the debt is not matched firm
Lower cost of issue
                           may have to be open to foreign
                           exchange risk.
Lower interest cost


Longer maturities
ADVANTAGES & DISADVANTAGES FOR
    INVESTOR TO ISSUE EUROBONDS

         Advantages             Disadvantages

Tax free income         Not a good idea for investors who
                         may need a repayment.

Low Risk investment


Convertible to Equity
                         There is always the risk defaulter.

Liquid investment
INTRODUCTUON ON FOREIGN BOND

Foreign bonds are regulated by the domestic market authorities and are
usually given nicknames that refer to the domestic market in which they
are being offered.


A foreign bond allows an investor a measure of international
diversification without subjection to the risk of changes in relative
currency values.
DISTINCTION
      Foreign Bond market                     Euro Bond market

       -Foreign government or               -Any borrower with credit
corporation or international          standing explicit rating rate
institution US-SEC-Register
                                                -Any widely used by
         -Local currency              international country
                             -                                     -
Typically US $50-500 Millions         Typically US $50-500 Millions
    -Bearer expect , in Bulldog and        -Bearer
Yankee markets
                                                       -Annual for fixed
                -As in                rate bond and quarterly for FRN’s
corresponding domestic market
                                             -Usually London Luxembourg
      -Foreign stock exchange
                                               -Wide international profile.
        -Domestic and overseas        Private individual play a major role
www.wikipidia.com
www.Google.com
www.mint-media.com
Global Capital Markets TY.BFM – Vipul
Foreign exchange market TY.BFM- Vipul
International  bond market   ppt

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International bond market ppt

  • 1.
  • 2.
  • 3. NAME ROLL NO. Bhavik Parmar 28 Sonu Pethani 32 Harsh Sanghavi 34 Shashank Pai 26 Vaishali Rawal 36 Dharmik Patel 30 3
  • 4. WHAT IS BOND MARKET ? The bond market is a financial market where participants buy and sell debt securities , usually in the form of bonds. The bond market primarily includes:- I) Government-issued securities. II) Corporate debt securities. 4
  • 5. MEANING OF 'INTERNATIONAL BOND' A bond issued in a country or currency other than that of the investor or broker. They include Eurobonds, which are issued in a foreign currency, foreign bonds, which are issued by a foreign government or corporation in the domestic market, and global bonds, which are issued in both domestic and international markets. INTERNATIONAL BOND IS FURTHER CLASSIFIED IN THREE TYPES 1) Domestic Bond 2) Euro Bond 3) Foreign Bond
  • 6. FEATURES OF INTERNATIONAL BOND 1) It is a debt market 2) It is a fund raising market 3) Fixed income instrument 4) Issued in foreign currency 5) It channelizing savings
  • 7. THE COMMON PROCESS OF ISSUING BOND Step 1:-A borrower will contact an investment banker. Step 2:- The lead manager will invite other banks. Step 3:-The managing group and banks will serve as underwriters for the underwriter issues. Step 4:-The various members of the underwriting syndicate receive a portion of the spread. Step 5:-The lead manager receives the full spread.
  • 8. INSTRUMENTS OF INTERNATIONAL BOND MARKET 1) Straight Fixed-Rate 2) Floating-Rate Note 3) Convertible Bond 4) Straight Fixed-rate with equity warrants 5) Zero coupon bond 6) Dual-Currency bond
  • 9. RISK OF INVESTING IN BOND 1) Inflation Risk 2) Interest Rate Risk 3) Default Risk 4) Downgrade Risk 5) Liquidity Risk 6) Reinvestment Risk 7) Rip-off Risk
  • 10. ADVANTAGES & DISADVANTAGES OF INTERNATIONAL BOND Advantages Disadvantages Diversify your portfolio Outperformed by Mutual Funds International fund raising  Fees instrument Risk Fixed income market Limited Selection Investment avenue(short term as well as long term)
  • 11. CHARACTERISTICS OF INTERNATIONAL BOND MARKET INSTRUMENTS Instruments Frequency of Size of Interest Pay off at Interest payment payment Maturity Straight Fixed-Rate Annual Fixed Currency of issue Floating-Rate Note Quarterly or Semi- Variable Currency of issue annual Convertible Bond Annual Fixed Currency of issue or conversion to equity share Straight Fixed-rate Annual Fixed Currency of issue with equity warrants plus equity shares from exercised warrants Zero coupon bond None Zero Currency of issue Dual-Currency bond Annual Fixed Dual currency 11
  • 12. INTERNATIONAL BOND AMOUNTS OUTSTANDING BY MAJOR INSTRUMENTS INSTRUMENTS Dec. 2008 Dec. 2009 March 2010 Straight fixed-rate 14428.4 17274.2 17235.9 Floating-rate note 7892.0 8357.2 7988.8 Straight fixed-rate with equity 396.7 447.2 446.1 warrants Total 22717.1 26078.6 25670.8 12
  • 13. INTERNATIONAL BOND AMOUNTS OUTSTANDING BY MAJOR ISSURES ISSURES Dec. 2008 Dec. 2009 March 2010 Financial Institutions 17,925.70 20,030.10 19,531.10 Governments 1,794.60 2,232.20 2,254.40 International Organizations 637.90 791.50 814.10 Corporate Issuers 2,359.00 3,024.70 3,071.20 Total 22717.20 26078.50 25670.80 13
  • 14. INTERNATIONAL BOND AMOUNTS OUTSTANDING BY MAJOR CURRENCIES CURRENCIES Dec. 2008 Dec. 2009 March 2010 Euro 10873.9 12387.6 11813.8 US Dollar 8215.1 9429.0 9718.1 Pound Sterling 1701.8 2145.5 2028.3 Yen 746.7 693.9 668.7 Other 1179.7 1422.5 1441.9 Total 22717.2 26078.5 25670.8 14
  • 15. WHAT IS DOMESTIC BOND Bonds help acquire orders and, in many cases, are a precondition for successful conclusion of a contract. For all entrepreneurs planning to enter tenders and conclude contracts for the delivery of goods or services we offer a wide range of domestic contract bonds. MEANING OF DOMESTIC BOND Bonds issued in the country and currency in which they are traded. Unlike international bonds, domestic bonds are not subject to currency risk. They usually carry less risk, as the regulatory and taxation requirements are usually known to investors in domestic bonds, or at least to their brokers and accountants.
  • 16. TYPES OF DOMESTIC BOND Public Sector Undertaking Bonds Corporate Bonds Financial Institutions and Banks Emerging Bond Markets Tax-Savings Bonds
  • 17. WHAT IS EUROBOND ? A euro bond is a debt contract between a borrower and an investor, which records the borrower's obligation to pay interest and the principal amount of the bond on specified dates. For -A firm issuing Yen bonds outside Japan . When a Japanese firm issues yen bonds in the Euro market.
  • 18. THE PROCEDURE FOR THE EUROBOND 1) Select a Lead Manager:- The borrower chooses one investment bank to be the lead manager of the bond issue. 1) Organize a Syndicate:- The lead manager negotiates with other banks to form managing group. This group then negotiates the terms of the bond issue with the borrower. 2) Selling the Bonds:-Once the syndicate is formed and the terms of the issue are agreed upon, the managing group buys the bonds from the borrower. The managing group then sells the euro bonds to the underwriters. 3) Principal Paying Agent:-A agent or trustee may also be appointed by the borrower to handle the paperwork and legal aspects of the euro bond issue and act as principal agent.
  • 19. UNIQUE CHARACTERISTICS OF EUROBOND 1) Coupon (The Interest Rate) 2) Maturity 3) Issuer 4) Secondary Market 5) Ratings 6) Taxation 7) A Eurobond is only for Medium and Long-term
  • 20. ADVANTAGES & DISADVANTAGES FOR COMPANIES TO ISSUE EUROBONDS Advantages Disadvantages Large amounts There are issue costs to take into account. Freedom and Flexibility If the debt is not matched firm Lower cost of issue may have to be open to foreign exchange risk. Lower interest cost Longer maturities
  • 21. ADVANTAGES & DISADVANTAGES FOR INVESTOR TO ISSUE EUROBONDS Advantages Disadvantages Tax free income Not a good idea for investors who may need a repayment. Low Risk investment Convertible to Equity There is always the risk defaulter. Liquid investment
  • 22. INTRODUCTUON ON FOREIGN BOND Foreign bonds are regulated by the domestic market authorities and are usually given nicknames that refer to the domestic market in which they are being offered. A foreign bond allows an investor a measure of international diversification without subjection to the risk of changes in relative currency values.
  • 23. DISTINCTION Foreign Bond market Euro Bond market -Foreign government or -Any borrower with credit corporation or international standing explicit rating rate institution US-SEC-Register -Any widely used by -Local currency international country - - Typically US $50-500 Millions Typically US $50-500 Millions -Bearer expect , in Bulldog and -Bearer Yankee markets -Annual for fixed -As in rate bond and quarterly for FRN’s corresponding domestic market -Usually London Luxembourg -Foreign stock exchange -Wide international profile. -Domestic and overseas Private individual play a major role
  • 24.
  • 25. www.wikipidia.com www.Google.com www.mint-media.com Global Capital Markets TY.BFM – Vipul Foreign exchange market TY.BFM- Vipul