PRIMARY MARKET

Corporate Bond Market

The corporate bond market is used by corporations and financial institutions to raise medium to long term debt financing. Funds can be raised in a variety of forms:

Primary Bond Market

The primary market is the marketplace where corporations and governments offer their bonds to investors. New bond issues are underwritten by one or more lead managers and a syndicate of co-managers. The underwriting process involves the following:

Standard Bond Offering Structure:

• Fixed rate new issues are generally offered at:
  
  
  1. A fixed spread (in bps) over a government benchmark rate (e.g. 10Y UST + 50bps)
  
  
  2. A fixed price/yield (e.g. 8% yield)
  
  


• Floating rate notes (“FRNs”) are offered at a spread over a short term floating rate index (e.g. 3M USD LIBOR)