hard · Debt Capital Markets
An issuer is deciding between issuing a 'bullet' bond and a 'sinker' (sinking fund) bond. A sinker bond is generally more attractive to an issuer who is concerned about:
- Negative convexity and the risk of being put back the bonds at a premium.
- The 'greenium' and meeting ESG key performance indicators.
- Interest rate volatility and the desire to keep a constant DV01 profile.
- Refinancing risk and the pressure of a single large maturity 'wall.'
Sign up free to see the explanation and track your rank →
More Debt Capital Markets practice
- In the context of Debt Capital Markets, what is a leverage-based margin ratchet?
- Which officer of a borrower is typically responsible for signing the compliance certificat
- Why is the Administrative Agent's role important for the margin ratchet?
- If a company has a leverage-based pricing grid and SOFR rises significantly while leverage
- What is meant by the 'bond floor' in the context of yield analysis?
- For a bond trading at a discount (below par), which yield measure is typically the same as
- What is a 'call schedule' for a corporate bond?
- If a bond's Yield to Worst is equal to its Yield to Maturity, what can we likely conclude