The long-term external financing of a corporation is satisfied through the bond market where issues of index-linked bonds, which are discussed in this thesis, is one alternative. (Finnerty&Emery 2001) An index- linked bond is a debt instrument where the investor is guaranteed the principal and premium amount in real terms. As the bonds cash flows are indexed to the inflation this implies that the issuer of an index-linked bond assumes an inflation risk. Purpose: The purpose of this thesis is to describe and examine corporate motives for choosing index-linked bonds as way of financing their business. Realization: Primary data was collected through interviews with corporate issuers of non-swapped index-linked bonds. Results: From our research it has been acknowledged that both internal and external factors determine the decision to issue index-linked bonds. The most important internal reason for the issuance was that this type of financing implies matching advantages, which helps lowering the companies’ risks. This is achieved by balancing the size and time of the cash inflows with the cash out- flows. Of the external factors we found that it is primary the financing cost that is of interest. The cost savings are primarily achieved because of the lower liquidity premium demanded when using index-linked bonds as a way of financing the business. We believe that this depends partly on the character of the investors and on market imperfections.

<p>The long-term external financing of a corporation is satisfied through the bond market where issues of index-linked bonds, which are discussed in this thesis, is one alternative. (Finnerty&Emery 2001) An index- linked bond is a debt instrument where the investor is guaranteed the principal and premium amount in real terms. As the bonds cash flows are indexed to the inflation this implies that the issuer of an index-linked bond assumes an inflation risk. Purpose: The purpose of this thesis is to describe and examine corporate motives for choosing index-linked bonds as way of financing their business. Realization: Primary data was collected through interviews with corporate issuers of non-swapped index-linked bonds. Results: From our research it has been acknowledged that both internal and external factors determine the decision to issue index-linked bonds. The most important internal reason for the issuance was that this type of financing implies matching advantages, which helps lowering the companies’ risks. This is achieved by balancing the size and time of the cash inflows with the cash out- flows. Of the external factors we found that it is primary the financing cost that is of interest. The cost savings are primarily achieved because of the lower liquidity premium demanded when using index-linked bonds as a way of financing the business. We believe that this depends partly on the character of the investors and on market imperfections.</p>

This study examined advanced refundings of Indiana school construction bonds from 1993 to 1996. Purposes were to: (a) add to the professional knowledge base about advanced refundings; (b) evaluate the financial consequences on taxpayers; (c) determine benefits as measured by interest rates, terms, and payment amounts; (d) determine whether selected financial conditions and demographic variables impacted refunding outcomes.The population was all instances of advanced refundings by Indiana public school districts in the period studied. Data were collected from the bond transcripts prepared by legal counsels and placed in tabulation forms developed for the project.Primary findings included:(a) Three quarters of the refunding occurred in the first 10 years of the paymentstream; 27% occurred in the first four years.(b) As the size of the issue increased, the cost (as a percentage of the issue)decreased.(c) Mean decrease in interest rate for the refizndings was .023915 or 239 basis points.(d) Net fiscal impact was generally positive, with a mean savings of $224,218. (e) A negative correlation existed between district wealth and annual paymentamount (i.e., districts with high assessed valuations had smaller changes inannual payments).(f) A positive correlation existed between interest rate change and refunding amount (i.e., large issues were more sensitive to slight changes in interest rates).Selected conclusions included:(a) The benefits of refunding diminished with time (i.e., greatest benefits are likely in the first quarter of the payment stream).(b) Some refundings occurred when the decline in basis points was below a standard level used for municipal bonds; this suggests that school officials may engage in refundings for reasons that extend beyond savings (e.g., political benefits).(c) An economy of scale between refunding size and costs supports existing research.(d) Costs for local school district counsel varied considerably, suggesting that no compensation standard was used.(e) Wealthier districts were less interested in lowering annual payments; their pursuit of refunding may have been motivated by flexibility (i.e., shortening the debt life, accessing fiscal resources).(f) Districts with large bond issues benefited from refunding even when the declines in interest rates were slight.Eight recommendations were formalized. / Department of Educational Leadership

Sukuk are an important mode of financing in the Islamic financial system. As usury (interest) is prohibited in Islam, conventional bonds are not suitable for investors in Islamic countries. Since their launch in the 1980s, Sukuk have gained recognition and popularity as a substitute for conventional bonds. However, their unique features mean that Sukuk are not always clearly understood. The aim of this study is to analyse the differences and similarities between Sukuk and conventional bonds in terms of their risk and return characteristics.

The thesis deals with the corporate bond markets as well as corporate bonds themselves. The main goal of the thesis is to identify and prove the fundamental aspects and prerequisites that influence the development of corporate bond markets, and restrict or encourage companies to issue bonds. The thesis also contains explanations of various phenomena associated with corporate bonds, which occur during the time.

Capital markets have changed profoundly since green bonds were first introduced in 2013 as a way of financing programs benefiting social and environmental sustainability. The purpose of this study is to investigate whether green bond issues are related to value creation as compared with conventional bond issues, and how the relative size of a bond issue may impact this relationship. Using bonds issued on Nasdaq Stockholm from 2014 to 2020, our study finds no significant abnormal returns for green bonds, the benchmark of conventional bonds nor the comparison of the means. Further, we could not find an interaction effect between the relative issue size and the green bond. Hence, this study finds no indication that green bonds create value. However, we show that relative size has a positive and significant regression coefficient in all models, meaning that the ​larger the relative size of a bond issue, the more the stock price is expected to increase.

Addressing environmental issues has been a top priority in recent years all over the world. There are several options on how to address this problem also from a financial perspective. Therefore, the purpose of this study was to investigate how green bond issuance announcement impacts publicly traded stock prices through cumulative abnormal return (CAR) perspective. We focused our scope only to the Swedish market. Theory is based on three different models: the capital asset pricing model (CAPM), the market model, and the market return model, which all have been applied also in previous studies. Several previous studies indicate that there is a positive CAR around the bond announcement date. In our case findings based on all three models were, that there in fact is evidence of CAR in the Swedish market at different event windows. The strongest relationships were found in event windows five days before the event date and up to twenty days post-event date. These results could be an indicator, that investors are valuating green bonds positively, and therefore for companies it might be beneficial to engage in more environmentally friendly project financing.

The major purpose of this dissertation is to explore the determinants of interest cost for state bonds. Various kinds of variables pertaining to issue characteristics, market characteristics, economic conditions, and political variables were statistically tested to assess their impact on the interest cost of state bonds. This research examines the variables found to be significant for local bonds, as well as some factors unique to state bonds, e.g., the types state agencies issuing debt and the effect of different state income tax policies.

No description available.

Forward rates and futures rates are conceptually identical in theory. In previous studies, the term structure has been used to demonstrate that there are synchronous changes among different maturities of coupon and zero-coupon bonds. Evidence has also been found that the magnitude of these synchronous changes is inversely related to the time to maturity. This study uses the Anderson-Leies synthetic zero-coupon yield curve from Caroline Leies' study of the Term Structure a/Zero-Coupon and Coupon Bonds. The term structure of the synthetic zero-coupon bonds is used to extract the "clean" implied forward rates embedded in its yield curve to be compared to the explicit futures rates of the Eurodollar. The evidence in this study suggests that the implied forward rates of the adjusted Anderson-Leies synthetic zero-coupon yield curve are not identical to the Eurodollar Futures rates. The adjusted forward rates were found, on average, to be less than the corresponding futures rates, suggesting that a risk premium is embodied in the Eurodollar futures rates. However, the adjusted forward rates are known to possess significant measurement errors that were unable to be corrected for, but whose possible sources are noted and explained. / Master of Arts