Corporate Fixed Income Securities

Abstract

To obtain financing, a corporation can rely on several sources of funds. In general, the sources of financing can be classified as equity and debt. Equity financing includes the sale of common stock and preferred stock. Because of the investment attributes of preferred stock, it is classified in the financial market as a fixed income security. Debt can be obtained by either borrowing funds from a bank or issuing debt obligations in the nonbank market. The latter includes corporate bonds, medium-term notes, asset-backed securities, and commercial paper. These debt instruments can be issued in the public market or privately placed. Corporate debt obligations are referred to as fixed income securities. Keywords: term bonds; bonds; serial bonds; indenture; mortgage debt; open-end mortgage; after-acquired property clause; release and substitution of property clause; first mortgage bonds; first refunding bonds; general and refunding mortgage bonds; collateral trust bonds; equipment trust certificates (ETCs); negative pledge clause; make-whole premium provision; yield-maintenance premium provision; make-whole redemption price; currently callable issue; noncallable; nonrefundable; bullet bonds; sinking-fund provision; balloon maturity; mandatory sinking fund; nonmandatory sinking-fund provision; specific sinking fund; nonspecific sinking fund; accelerated sinking-fund provision; speculative-grade bond; high-yield bond; junk bonds; deferred-interest bonds; step-up bonds; payment-in-kind; extendible reset bond; Trade Reporting and Compliance Engine (TRACE); interdealer platforms; dealer-to-customer platforms; multiple dealer-to-customer platforms; single dealer-to-customer platforms; private-placement market; Rule 144A private placement; traditional private-placement market; non-144A securities; 144A securities; medium-term note (MTN); rate offering schedule; structured notes; reverse inquiry; preferred stock; fixed-rate preferred stock; nonparticipating preferred stock; participating preferred stock; prior preferred stock; preference preferred stock; cumulative preferred stock; noncumulative preferred stock; convertible preferred stock; perpetual preferred stock; adjustable-rate preferred stock; auction preferred stock; remarketed preferred stock; intercorporate tax dividend exclusion