Equity exists in many forms. In securitization, equity is the tranche that takes the first loss and controls the deal. In a mutual insurer/bank/thrift, etc., the book equity is held by the dividend-receiving policyholders. The real equity is held by management, who actually control the place, because the dividend-receiving policyholders will not vote them out. In a credit tenant lease, there is the guy that owns the property, and typically he puts up a teensy amount of equity, because there is a “credit tenant,” one that has an investment grade rating, and the mortgage is secured by: View full article »
Tag Archive: Corporate bond
Corporate bond market and equity market is interlinked , for when there is a bad news about the company the share prices goes down and the corporate bond prices goes down. The corporate bond market is also deeply linked to the government bonds market if the interest rate goes up bond prices of both the market goes down. Currency spot and derivative market of the world are also connected with the India bond market.
In India it’s been treated differently and had failed. In order to achieve progress critical requirement is to make perspective of the Bond View full article »
THE negotiated dealing system (NDS) for government securities does not have customers but hostages. It uses a monopoly on gilt clearing and settlement to deny competitors like NSE straight-through-processing. Competing bilateral electronic platforms have not been allowed. Its deals are exempt from stamp duty. It has a waiver for the 5% volume cap for voice intermediaries. Banks received a not-so-subtle regulatory nudge for usage. Most importantly, the NDS uses the clearing and settlement toll gate (a monopoly that gives it a 55% net margin) to cross subsidise View full article »
Worldly wisdom teaches that it is better for reputation to fail conventionally that to succeed unconventionally”
Life is either a daring adventure or nothing. Security does not exist in nature, nor do the children of men as a whole experience it. Avoiding danger is no safer in the long run than exposure.
I can calculate the motions of the heavenly bodies, but not the madness of View full article »
In 2003 Investment legend Warren buffet called them as weapons of mass destruction.
Couple of weeks I did an article on Fixed Income Investments in Indian Market. And provided some caveat. Before getting back to the Indian bond market let’s try to see the key components of Fixed Income securities, It’s the Credit quality, yield, and maturity are key components of fixed-income securities.
Well Credit quality is an indicator of the ability of the issuer of the fixed income security to pay back his obligation. The credit quality of fixed-income securities is usually assessed by independent rating agencies View full article »