UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75339  
Subject: Re: Corporate Bond Market Spreads Date: 8/11/1999 8:57 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Intercst, thanks for the posting. I hope you will share some of your expertise over on the Bond and Fixed Incomes board under Investors Roundtable.

Agreed that it is better not to buy bonds on the open market if you can avoid it. New issues appear to be a better deal. But in reality their costs are hidden.

If you follow the trail of a corporation that decides to issue a bond for financing: deals are struck along the way, the expensive services of the investment banker are retained to price the bond, decide on the coupon and maturities, and get it rated, and finally a distribution mechanism offers the bond to the individual willing to buy it. Meanwhile mechanisms are set up to record who owns each bond and pay the interest payments.

Its a pretty good bet the corporation that issues the bonds pays well for all these services. The individual that buys it pays some of it too.

Some see this as an antiquated or even shady side of Wall Street. But its a valuable service. The question is can it be made more efficient. Bonds do provide capital for those who need it--presumably at a price they feel is competitive or attractive. In reality it gives corporations more options for financing. And it gives investors willing to take the time to learn attractive but usually conservative investment opportunities.
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement