Bonds of companies, an attractive investment

www.minus19.com

11-01-2009 | Javier Gomez

amortizable bonds

The companies bonds are one the most attractive options at present to invest our savings. Not so insurances like the Government stock, but yes many other profitable ones. They will not leave to us both yield and the direct investment in Stock Exchange if this one we are right in it, but neither they take so much risk as this one.

The ideal thing in moments of high economic risk like the current one, if we choose to invest in bonds, is to look those that there express big companies, like banks props of his country, or companies of a recognized solvency. For moments that, also, are characterized by a low service on the part of the Bonds and Treasury bills, the opportunity to buy this type of bond corporate is major and even more when the existing suspicion in the financial system seems to be vanishing little by little.

This Friday, for example, the BBVA placed in only two hours a bonds emission at the price of 1.000 million euros. But also, the offer subscribed in 2,8 times, reaching the demand 2.800 million euros, what demonstrates clearly the gradual recovery of the financial market.

But: what is a bond? how does it work?

The bond is a title that is expressed in the long term by that the company or borrower gets a money in exchange for reimbursing it in a certain date some years later, more an agreed interest that one occurs between the period that formalizes the loan and the date of refund. Interest that in case of the bonds goes in name “coupon“.

There are different bonds classifications, but the one that more we are interested in in these moments is indexed to the guarantee that they them cover, so that we can distinguish between mortgage bonds and amortizable bonds.

The mortgage bonds have the support of a mortgage or long-term assets of the company that expresses the bond.

The amortizable bonds do not go it encloses neither no new insurance nor coverage, therefore the risk is major, but on contrary, they offer major profitability.

The latter case is a good investment option, whenever, as we have said previously, we do it in those expressed by companies with an important solvency, so that we make sure minimally that they will reimburse the money to us in the due future. For that reason, and more in an economic situation like the current one, we must avoid the bonds garbage or speculative, expressed for companies of the second line or with a solvency more than doubtful.

On the other hand, and like part of these amortizable bonds, there are the convertible bonds, another different scale, in that the amortization is realized by actions of the proper company at a price that had been fixed at the moment of the emission of the bond. Here the coupon or interest is lower, because it is played by the future increase forecasts in Stock Exchange of the value of the title, for what also, for it, the risk is major.

To read more on: Investments, finance
Related articles:

There are no comments yet...