BONDS IN INDIA

PREPARED BY :
ANIL KANGOTRA
SSSS(2008MBA02)
 TYPES OF BONDS
CORPORATE BONDS

TREASURY BONDS

MUNICIPAL BONDS
 CORPORATE BONDS

CORPORATE BOND IS A BOND ISSUED BY A

CORPORATION BASICALLY FOR THE
EXPANSION.
 CORPORATE BOND GENERALLY HAVE A HIGH
DEGREE OF DEFAULT.
THIS RISK DEPENDS, OF COURSE, UPON THE
PARTICULAR CORPORATION ISSUING THE
BOND, THE CURRENT MARKET CONDITIONS
AND GOVERNMENTS TO WHICH THE BOND
ISSUER IS BEING COMPARED AND THE RATING
OF THE COMPANY.
 CORPORATE BOND

THESE ARE COMPENSATED FOR THIS RISK BY

RECEIVING A HIGHER YIELD THAN
GOVERNMENT BONDS.
DEFAULT RISK CAN BE QUANTIFIED USING
SPREAD ANAYSIS BY MAKING THE DIFFERENCE
IN YIELD BETWEEN A GIVEN CORPORATE BOND
AND A RISK-FREE TREASURY BOND OF THE
SAME MATURITY.
MATURITY IS GENERLLY FOR A YEAR AFTER
THE ISSUE.
 TREASURY BONDS

TREASURY BONDS ARE BASICALLY ISSUED BY

THE GOVERNMENT INSTITUTIONS.
THEY HAVE A LONGER TERM MATURITY OF 20-
30 YEARS.
THEY HAVE A COUPEN PAYMENT EVERY SIX
MONTHS LIKE T- NOTES.

 MUNICIPAL BONDS

MUNICIPAL BONDS ARE THE BONDS ISSUED BY

THE CITIES , LOCAL GOVERNMENT , THE
REDEVELOPED AGENCIES , OR ANY OTHER
GOVERNMENT AGENCIES ( BELOW THE STATE
LEVEL).
INTEREST INCOME RECEIVED BY HOLDERS OF
MUNICIPAL BONDS IS OFTEN EXEMPT FROM THE
FEDERAL INCOME TAX AND FROM THE INCOME
TAX OF THE STATE IN WHICH THEY ARE ISSUED,
ALTHOUGH MUNICIPAL BONDS ISSUED FOR
CERTAIN PURPOSES MAY NOT BE TAX EXEMPT.
 FEATURES OF MUNICIPAL BONDS

MUNICIPAL BONDS ARE TYPICALLY CALLABLE.

PAYS SEMIANNUALLY COUPEN RATES.
MUNICIPAL BONDS CAN BE PURCHASED
DIRECTLY FROM THE ISSUER AT THE TIME OF
ISSUENCE OR FROM THE BOND HOLDERS
AFTER THE ISSUANCE.