Chapter 6: Corporate Debt

Chapter summary

Chapter 6 covers corporate debt instruments: secured bonds (mortgage, collateral trust, equipment trust), unsecured bonds (debentures, subordinated debentures), and money market instruments (commercial paper, bankers' acceptances, negotiable CDs). Convertible bonds carry a lower coupon because the conversion option has value. Know the priority of claims in bankruptcy: secured debt, senior unsecured, subordinated debt, preferred stock, common stock.

Key concepts

• Types of Corporate Bonds
• Non-U.S. Market Debt
• Money-Market Securities
• Convertible Bonds
• Structured Products
• Types of Corporate Bonds
• Non-U.S. Market Debt
• Money-Market Securities
• Convertible Bonds
• Structured Products
• Rank corporate bonds by security: secured (mortgage, equipment trust,...
• Identify which bond type has priority in liquidation and why secured...

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