Categorization of Corporate Bonds Posted by Jeevan Utsav on May 19, 2022

Categorization of Corporate Bonds

We at the portal of Jeevan Utsav are enabling the customers to purchase corporate bonds. These customers use to find different categories of corporate bonds. Different types of bonds are coming under this category. They are explained as below.
PSU Bonds- The full form of PSU bonds is public sector undertaking bonds. Their management and ownership are handled by state and central government. They use to work under the administrative control of the government of India. PSU bonds are found to be transferable. By acquiring Usance Promissory Note’s form, they are supposed to be issued.
PSU Perpetual Bonds-When PSU bonds are possessing the perpetual nature then it is called as PSU perpetual bonds. They use to work under public undertakings by having the feature of transferability. Public sector undertaking is responsible for controlling them administratively. Our portal is highly concerned about the PSU perpetual bonds.
PSU Tax-Free Bonds-The bonds that are issued by public sector undertakings are called as PSU tax-free bonds. Their interest rates are found to be fixed. Their tenure is found to be of more than 10 years. PSU tax-free bonds can be redeemable at the time of maturity. On the stock exchange, they are found to be tradable.
State Govt. Guaranteed Bonds-State owned enterprises issue the bonds guaranteed by the state government within the situation of lower creditworthiness arises in these enterprises and these bonds are called state government guaranteed bonds. Capital can be raised through it on the part of the issuer. It’s borrowing cost is low. Investors get an extra layer of security through the state govt. guaranteed bonds. They are always found to be in demand.
DD Bond-The full form of DD bonds is deep discount bonds. Their value is found to be lesser if compared to their par value at the time of their selling. The available discount on these bonds is 20% or more to par. Deep discount bonds are available at low market prices. At the time of maturity of these bonds, the whole face value is obtained by the person who has purchased these bonds. The selling of these bonds takes place at a discount or premium.
Private Sector Bonds-If the investors want to increase the funds of the project then in such a case the bonds are issued by the companies and these bonds are known by the name of Private sector bonds. They are supposed to be issued by private and public companies. The variation is found to be observed in them with respect to its features. These features are yields, maturities, and credit ratings. The corporations are on the way of issuing private sector bonds for doing investment in projects for the sake of development. The investors get the interest payment semiannually.
Private sector Perpetual Bonds-An instrument of fixed income whose nature is found to be perpetual is called as private sector perpetual bonds. They are available with no maturity date. They are not found to be redeemable. Private sector perpetual bonds are also known by the name of prep bonds. Calling back the bonds is the option available to the persons who issue these bonds.

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