Issue Types

Types of Debt Instruments

A wide range of debt instruments are available to investors. In light of MiFID, NYSE Euronext has adopted the Classification of Financial Instruments (CFI) code maintained by the International Organization of Standardization (ISO).

Bonds

Any interest-bearing discounted security that normally obliges the issuer to pay the bondholder a contracted sum of money, and to repay the principal amount of debt.

Convertible bonds

A bond that can be converted into other securities.

Bonds with warrants attached; A bond that is issued together with one or more warrant(s) attached as part of the offer. The warrant(s) grant the holder the right to purchase a designated security — often the common stock of the issuer of the debt, at a specified price.

Medium-term notes

A negotiable debt instruments offered under a program agreement through one or more dealers upon request of the issuer. The program defines the terms and conditions of the notes.

Money market instruments

A debt securities that generally give the holder the unconditional right to receive a stated fixed sum of money from the issuer on a specified date. Issuance tends to have a short life, usually 12 months or less.

Others (miscellaneous); Debt instruments which do not fit into any of the above groups such as asset-backed securities or mortgage-backed securities.

Types of Interest

Fixed rate

All interest payments are known at issuance and remain constant for the life of the issue.

Zero rate/discounted

No periodical interest payments are made; the interest charge (discount) is the difference between maturity value and proceeds at time of acquisition.

Variable

The interest rate is subject to adjustment through the life of the issue.

Redemption/Reimbursement

The following indicate the retirement provisions made for debt issues:

Fixed maturity

The principal amount is repaid in full at maturity.

Fixed maturity with call feature

The issue may be called for redemption prior to the fixed maturity date.

Fixed maturity with put

The holder may request the reimbursement of his bonds prior to the maturity date.