This document discusses various forms of long term debt financing for companies. It describes capital markets which facilitate the trade of securities like stocks and bonds. Private placements involve direct selling of bonds to a small number of qualified institutional investors like banks and insurance companies. Commercial papers are short term unsecured notes issued by large companies and financial institutions with maturities of up to nine months. Corporate bonds are longer term debt instruments issued by corporations to raise funds. Medium term notes have maturities between 5-10 years and combine aspects of commercial papers and corporate bonds.

1. Long Term Debt
Presented By:
Adwitiya Gupta
MBA 3rd Semester

2. The Capital Markets
• A Place for trade of financial securities like bonds,
stocks, etc. by individuals and institutions.
• Helps
• Consists of primary markets and secondary
markets
• Another important division is based on nature of
securities traded, i.e. stock market and bond
market.

3. The Private Placements
• “Any offer of securities or invitation to
subscribe securities to a select group of
persons by a company (other than by way
of public offer) through issue of a private
placement offer letter and which satisfies
the conditions specified in this section
including the condition that the offer or
invitation is made to not more than 50 or
such higher number of persons as may be
prescribed (excluding QIB's and
employees offered securities under ESOP)
in a financial year“
Companies Act 2013

4. Contd..
• The issue is sold directly to a small number of
banks, insurance companies, or other investment
institutions.
• Privately placed bonds cannot be resold to
individual but only to other qualified institutional
investors.
• Custom Tailored debt issues and significantly less
cost

5. Commercial Papers
• Large well-known companies issue their own short-term
unsecured notes known as commercial
paper (CP).
• Financial institutions, such as bank holding
companies and finance companies, also issue
commercial paper, sometimes in very large
quantities.
• Maximum maturity is of nine months though most
paper is for 60 days or less.
• There is also a market for asset-backed commercial
paper here the company sells its assets to a special-purpose
vehicle that then issues the paper.

6. Corporate Bonds
• It is a bond that a corporation issues to raise
money effectively in order to expand its business
• Longer-term debt instruments, generally with a
maturity date falling at least a year after their
issue date.
• Often listed on major exchanges so these are also
called listed bonds
• Have a higher risk of default

7. Medium term Notes
• A debt note that usually matures in 5–10 years,
but the term may be less than one year or as long
as 100 years.
• Unsecured promissory notes placed through
dealer and have fixed rate of interest
• These are the hybrids of commercial papers and
corporate bonds- they are relatively long-term
instruments like bonds and like bonds these are
not underwritten but are sold on a regular basis
either through dealers.

8. The Bank Financing

9. THANK YOU