Bond

What is a bond?

A bond, simply put, is a loan that is split into many small parts. Instead of a single bank granting a large loan to a company, many individual investors can each contribute smaller amounts. Each investor can purchase one or more of these “bond units” and thereby becomes a creditor of the company. The security – referred to as a bond, note, or debenture – certifies the investor's rights against the issuer (the borrower). It entitles the holder to receive regular interest payments as well as full repayment of the invested amount at the end of the term.

On CONDA Capital Market, different types of bonds are made digitally and publicly accessible.

 

Standard Bond:

• Fixed or variable interest rate
• Clearly defined term Repayment at the end of the term
• Investors do not receive an ownership stake in the company but act as creditors

 

Subordinated Bond:

• Claims are paid in order of their priority
• Subordinated claims rank below other creditors
• In return for taking a lower priority, investors receive a premium in the form of higher interest rates
• This type of bond carries a higher risk of total loss, but also offers the prospect of higher returns

 

Convertible Bond:

• This bond can or must be converted into shares of the company at a later point – depending on the terms of the contract
• It combines fixed interest payments with potential equity participation
• Upon conversion, investors usually receive a discount on the share price

 

Bonus Interest Component: In addition, CONDA Capital Market may offer a bonus interest component. This bonus can be tied to revenue performance or other milestones – for example, achieving sports goals in the case of sports clubs.