Questions tagged [perpetual bonds]

CryptoDynastyLord Thu Aug 01 2024 | 7 answers 1614

I'm curious to know which banks are issuing perpetual bonds. Can you elaborate on the types of financial institutions that typically offer these types of bonds, and what makes them attractive to investors? Additionally, are there any specific regions or countries where perpetual bond issuance is more prevalent? I'm interested in understanding the market dynamics and potential risks associated with investing in perpetual bonds issued by banks.

JejuSunshineSoulMate Wed Jul 31 2024 | 7 answers 2133

Are perpetual bonds really a smart investment option? On one hand, they offer investors a steady stream of income in the form of interest payments, with no maturity date in sight. This can be appealing for those seeking long-term stability and a predictable cash flow. However, perpetual bonds also come with some risks. For instance, the issuer's creditworthiness can affect the bond's value, and inflation can erode the real value of the interest payments over time. Additionally, perpetual bonds can be illiquid, making it difficult to sell them if you need to access your funds. So, are perpetual bonds worth considering as part of your investment portfolio? Let's delve deeper into the pros and cons to find out.

Caterina Wed Jul 31 2024 | 7 answers 1438

Perpetual bonds, also known as perpetual securities or perpetual debt, are a type of bond that does not have a maturity date. This means that the bondholder will receive interest payments indefinitely, but the principal amount of the bond is not repaid until the issuer chooses to do so or the bond is redeemed through a special event such as a takeover or liquidation. But the question remains, is it safe to invest in perpetual bonds? While perpetual bonds offer the potential for steady income streams, they also come with risks. For instance, the lack of a maturity date means that investors may be exposed to interest rate risk for an extended period. Additionally, the value of perpetual bonds can be highly sensitive to changes in credit ratings, as a downgrade could result in a significant decline in the bond's market price. Furthermore, perpetual bonds are often issued by companies or governments with lower credit ratings, which could increase the risk of default. In the event of a default, investors may not receive their interest payments or be able to recover their principal investment. So, is it safe to invest in perpetual bonds? The answer depends on your individual risk tolerance and investment goals. While perpetual bonds may offer attractive yields, they also come with significant risks that should be carefully considered before making an investment decision.

Valentino Wed Jul 31 2024 | 0 answers 0

Could you elaborate on the potential drawbacks associated with perpetual bonds? Are there specific risks investors should be aware of, such as uncertainty in future interest rates or a lack of maturity dates that could affect liquidity? Additionally, how might these bonds perform during economic downturns, and are there any historical examples of perpetual bonds struggling to meet their obligations? Understanding these disadvantages is crucial for making informed investment decisions.

KatanaSharpness Tue Jul 30 2024 | 0 answers 0

Excuse me, but I was wondering if you could clarify something for me. The concept of perpetual bonds has always intrigued me, but I'm still a bit unclear on their liquidity. So, my question is, can perpetual bonds actually be sold? I understand they don't have a maturity date, but does that mean they're completely illiquid and untradable? Or is there a secondary market where investors can buy and sell perpetual bonds, just like with other types of bonds? I'd appreciate any insight you can offer on this matter.