COMMERCE 3AC3 Chapter Notes - Chapter 14: Promissory Note, Private Placement
11 Feb 2015
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Long-term debt: obligations that are not paid within one year or one business operating cycle and examples include: Often the long-term debt has restrictive covenants (terms) attached that are used to limit activities to protect both the lender and the borrower. Bond indenture: a promise (by the lender to the borrower) to pay: A sum of money at the designated date and. Periodic interest at a stipulated rate on the face value. Bonds can be sold through an investment banker or by a private placement. Bearer (coupon) bonds: a bond that is not recorded in the owner"s name and may therefore be transferred from one owner to another. Secured debt: debt that is secured by collateral (i. e. real estate) Term bonds: bonds that mature on a single date. Income and revenue bonds: income bonds pay no interest unless the issuing company is profitable; revenue bonds" interest is paid from a specific revenue source.
