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Straight bonds are,
as the name suggests, bonds as simple as they can be, with a fixed coupon
rate and maturing on a date fixed at the time of issue. They are often
called 'plain vanillas' as these bonds do not carry any other enhancement
features. But they tend to carry high coupon rates paid either semi-annually
or annually.
Remarks: Corporate Bonds or loan stocks are long term
fixed interest income debt securities income debt securities issued by
companies. They usually have a lifespan of five years and are redeemable at
par value on maturity. Bond and loan stock issues vary in many ways and have
many optional features. Some are secured by collateral, others are backed by
guarantees; yet others have no collateral support and are only unsecured
promises to pay. In addition, the bond indenture may provide that the bond
may be redeemable at a specified price.
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