Investment

How Do CD Bonds Work?

Bonds are essentially a sort of borrowing, similar to CDs. A bondholder lends money to a government or corporation that issues the bond for a specified period of time in exchange for a set amount of interest. What is the difference between CDs and bonds? Bonds and certificates of deposit (CDs) are both debt-based fixed-income […]

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How Do City Bonds Work?

Municipal bonds (also known as municipal debt) are a type of debt “State, city, county, and other local agencies issue debt securities to support day-to-day commitments as well as capital projects such as the construction of schools, roadways, and sewer systems. When you buy municipal bonds, you’re effectively lending money to the bond issuer in […]

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How Do CoCo Bonds Work?

Banks use CoCo bonds to withstand financial losses. Investors in CoCos agree to take equity in exchange for the regular income from the debt when the bank’s capital ratio falls below regulatory standards, rather than converting bonds to ordinary shares merely on the basis of stock price increase. The stock price, on the other hand, […]

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