Course Objectives

A full understanding of the mechanics and terminology of bonds. A full explanation of how and why bonds are issued. A full explanation of how and why bonds are purchased. Identification of the main risks associated with bond markets


Who Should Attend?

Capital market regulators, stockbrokers, institutional Government officials


Prerequisite Courses

None


Course Overview


• Bond Markets Terminology & Structures:
The cash flow structure of bonds, Interest calculations and day count

• Conventions:
Fixed coupon securities, FRNs, Zero coupons, Collateralized issues,
Public offerings, Medium term notes, Private placements.

• The Issuance Process:
Bond market conditions, Why issuers seek long term funding, Investor’s & Issuer’s objectives, Selecting bond structure, Issue size, Role of the manager, Fees, Maturity, Timing, How swaps are used with new issues, All in price on a fixed and floating basis.

• Why investors buy bonds:
Different types of investor, Different risk/reward needs, Credit, interest rate, foreign exchange risks, how investors identify value, Relative value/spreads, Liquidity.

• Combining swaps & bonds:
Generic asset swap structures, Par/par structures, High coupon bonds, Low coupon bonds, Up-front payments, Accrued interest

• Bonds and risk:
Introduction to, Credit risk, Interest rate risk, FX risk, Problems with liquidity & valuation.

• Non-vanilla bonds:
Introduction to how different risk profiles can be added to bonds using swaps



Course Materials

Notes, hand outs and exercise materials