Since the first Corporate Bond was issued in 1992, we currently have more than 1500 corporate debt instruments listed on the JSE Debt Board.
These instruments provide a way for the corporate entities concerned to raise money for large capital projects. Investors lend their money in return for regular interest payments. After a predetermined period, the loans are paid back to the investors. Listing the bond on the JSE Debt Board improves the issuers’ ability to raise finance because it allows investors to sell the loan to other investors should they wish to.
Liquidity remains relatively low compared with government debt, but issuance keeps growing. Some of the instruments on this market are:
- Fixed Rate Bonds
- Fixed Rate Bonds
- Inflation Linked Instruments
- Commercial Paper
- Credit Linked Notes
- Asset Backed Securities
- Mortgage Backed Securities.
Who is this for?
The market is used by Issuers to raise debt. It is also used by investors and banks to buy the paper to enhance returns on portfolios.
The listed debt market is predominately a wholesale market with large investors taking positions in bonds to satisfy portfolio needs. However, it also caters for the smaller investor. Anyone can buy these instruments.
- Depending on the instrument, interest is fixed or floating, or may even be zero.
- Each loan has specific characteristics that appeal to different investors at different times, so there is a secondary market in Corporate Bonds.
- Corporate Bonds carry no claim to ownership.
- No dividends are paid to bondholders.
- Bondholders’ repayments take priority over payments to shareholders.
- Buying Bonds is often considered to be a less risky way to invest in a company than buying Shares.
- Corporate Bonds are often considered to be a more risky investment than Government Bonds.
- Corporate Bonds usually pay higher interest rates than Government Bonds, even for companies with excellent repayment ability.
How to get Corporate Bonds
To access this product, register as a client with a JSE member.