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Bonds

Bonds are fixed income securities issued to lenders of long-term loans, with a maturity date. They provide returns in the form of fixed periodic payments.

Loan Stocks

Products

Loan Stocks

A loan stock is a security issued by a company in respect of a loan made by investors. Loan stocks may be secured, unsecured, convertible or non-convertible, but are often unsecured, unlike debentures.

Types of Loan Stocks

  1. Unsecured loan stocks carry higher risk than debentures, and in the event of a winding-up, unsecured loan stock holders rank alongside all other unsecured creditors
  2. Convertible loan stocks carry the right to be converted into ordinary shares of the company on pre-arranged terms and within a limited period. The objective of issuing a convertible loan stock is to obtain fixed interest finance at a relatively low rate of interest and at the same time make it attractive to potential holders by the offer of equity participation at a later date.
  3. Notes
    There also fixed income securities with a maturity date, and may or may not be redeemable.