FNCE20005 Lecture Notes - Lecture 6: Byrsonima Crassifolia, Root Mean Square, Corporate Bond
Document Summary
Raising capital: debt and leases: raising debt capital. The nature of debt: temporary contribution of capital by investors for a speci ed time, key characteristics: Xed and prior ranking contractual right to a return on capital. Xed and prior ranking contractual right to a return of capital. From an investor"s view debt capital is the least risky type: di erent classes of debt typically distinguished by di erences in ranking. Debt capital: more frequent/important than equity nancing, when companies borrow money, they are obligated to: Debt covenants: speci c provisions in the debt contract, designed to protect the interests of lenders, negative (or restrictive) covenants ( not to do ) Restrict dividends paid: positive (or a rmative) covenants ( to do ) Provide audited nancial statements to the lenders. Debt securities outstanding and issued by non- nancial corporations and bank-issued debt - as at may 2017. Types of debt: bank or issued debt: bank loans - preferred in australia.
