Abstract
The bond was originally invented to finance wars in the sixteenth century, and then over the next centuries, the British modernized it to finance government activities.1 Today, bond issuance has become one of the most important and effective ways of raising finance for a country or enterprise. By selling bonds to bondholders, the issuer receives the money and promises to repay the money in the future plus regular interest payments. On the other hand, bondholders can obtain liquidity by trading their bonds in the capital markets. Such a financial instrument has become popular worldwide, as Ferran articulates: ‘Bonds are a very flexible form of financing for companies because the terms of issue are infinitely adaptable to the individual issuer’s circumstances and the prevailing market conditions at the time of issue. Large corporate issuers are best placed to exploit the flexibility that bond markets provide.’2 In China, the...
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