What is a bond?
Put simply, a bond is a loan that is broken down into many small parts. Instead of a bank granting a company one large loan, many individual investors can do so with smaller amounts.
The security at a glance
The security – known as a bond or debenture – securitises investors' rights vis-à-vis the issuer. It entitles holders to demand regular interest payments and full repayment of the invested amount at the end of the term.
On CONDA Capital Market, various forms of bonds are made accessible digitally and publicly.
Term
Limited, from 3 years
Type of capital
Debt or mezzanine capital
Bonus interest possible
e.g. revenue- or performance-based
Bond variants
Bond (classic)
Fixed or variable interest rate
Clearly defined term
Repayment at the end of the term
Investors are creditors, not shareholders
Subordinated bond
Subordinated claims relative to other creditors
Higher risk of total loss
In compensation: higher interest
For risk-aware investors with higher return expectations
Convertible bond
Can or must be converted into shares
Combines fixed interest with potential equity participation
On conversion, usually a discount on the share price
Flexible depending on the contract terms
Return opportunities
Interest payments
Annually or semi-annually
Repayment of the nominal value
At the end of the term
Optional capital appreciation
On conversion into shares
Advantages
For investors
Regular and predictable interest payments
Repayment of the invested capital at the end of the term
Access to attractive corporate financings with appealing interest rates
On conversion: subsequent participation in the company's success
For issuers
Fast and flexible capital raising without giving up company shares
Predictable cost structure and flexible design possible
A good addition to a healthy financing mix
A financing alternative to banks
Risks
Subordination
In economically difficult times, there is a risk that no interest and no repayment will be made. In the event of insolvency, subordinated claims generally receive no quota.
Interest and repayment risk
Interest payments and repayment depend on whether the company is in a sound economic position.
Risk of total loss
The risk of total loss is significantly higher than with other investment options.
Risk warning
Acquiring this investment involves significant risks – up to total loss. Inform yourself carefully before investing and seek professional advice.
Invest in bonds now
Discover current bonds on CONDA Capital Market and start your investment from small amounts.