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Bond Markets

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Bond Markets Workshop, (One Day)

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The course will provide:

  • A full understanding of the mechanics and terminology of bonds
  • Full explanation of how and why bonds are issued
  • Full explanation of how and why bonds are purchased
  • Identification of the main risks associated with bond markets

Training will be in a workshop format. This will include a mixture of presentation and case study material.

Below is a summary of the workshop content. The day has been placed in a logical sequence and addresses the main products, motivations and risks associated with bond markets.

Morning

Introduction to Workshop

  • Objectives
  • Format

Bond Markets Terminology & Structures

  • The cash-flow structure of bonds
  • Interest calculations and day count

Conventions

  • Fixed coupon securities
  • FRNs
  • Zero Coupons
  • Collateralised issues
  • Public offerings
  • Medium term notes
  • Private placements

The Issuance Process

  • Bond market conditions
  • Why issuers seek long term funding
  • Investor's & Issuer's objectives
  • Selecting the bond structure
  • Issue size
  • Role of the manager
  • Fees
  • Maturity
  • Timing
  • How swaps are used with new issues
  • All in price on a fixed & floating basis

Afternoon

Why investors buy bonds

  • Different types of investor
  • Different risk/reward needs
  • Credit, interest rate, foreign exchange risks
  • How investors identify value
  • Relative value/spreads
  • Liquidity

Combining swaps & bonds

  • Generic asset swap structures
  • Par/par structures
  • High coupon bonds
  • Low coupon bonds
  • Up-front payments
  • Accrued interest

Bonds and risk

  • Introduction to:
  • Credit risk
  • Interest rate risk
  • FX risk
  • Problems with liquidity & valuation

Non-vanilla bonds

  • Introduction to how different risk profiles can be added to bonds using swaps

End of Workshop & Review

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