Fixed Income Securities
Global bonds, Foreign bonds or Eurobonds (international bonds) - a bond that is distributed and can be issued in a single domestic market or on a pan-European/global basis. A foreign bond is issued in a domestic market by a borrower that is domiciled in a foreign country and is normally denominated in the currency of the market in which it is issued. A Eurobond is issued and traded outside the country in whose currency the bond is denominated: for instance the bond could be issued by an American company in U.S. dollars, but sold in a European country or any other foreign market. The bonds vary in both maturity date and quality of credit.
Domestic bonds - a bond issued and traded within the issuer country and denominated in the currency of that country. Unlike international bonds, domestic bonds are not subject to currency risk. They usually carry less risk, as the regulatory and taxation requirements are usually known to investors, or at least to their brokers and accountants.
Medium-term notes (MTN) - an asset holding period or investment horizon that is intermediate in nature. The exact period of time that is considered medium term depends on the investor's personal preferences, as well as on the asset class under consideration. In the fixed-income market, bonds that have a maturity period of between one to 10 years are considered to be medium-term notes.
Commercial paper (CP) - an unsecured, short-term debt instrument issued by a corporation. It is usually issued for the financing of accounts receivable, inventories and meeting short-term liabilities.
Certificates of deposit (CD) - a certificate usually issued by a commercial bank to a person depositing money for a specified length of time at a specified rate of interest. A CD is usually of a short-term duration.
Convertible bonds - a bond that can be converted into a pre-determined amount of the company's equity at certain times during its life. This is usually done at the discretion of the bondholder.
Debentures - a long-term security yielding a fixed rate of interest issued by a company and secured against assets. It is not secured by physical assets or collateral.
Equity-linked notes (ELN) - debt instruments that differ from a standard fixed-income security in that the final payout is based on the return of the underlying equity, which can be a single stock, basket of stocks, or an equity index.
Stripped coupons - is the practice of detaching the rights to periodic interest payments (coupons) from the underlying bond and trading them as an instrument separate from the bond, which then becomes a new, zero-coupon financial instrument.