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Bonds

The terms fixed-income bonds, fixed-income securities, pensions, bonds and debt securities are often used as synonyms for interest-bearing securities. The SIX Swiss Exchange bond market comprises all of the classic debt securities from straight bonds to convertible bonds.

Bonds are usually listed as percentages, which means that, unlike shares, they are not traded as units, but as nominal values. Prices are always given as percentages. They feature fixed interest rates and predetermined durations and forms of repayment. Hence the purchaser is the creditor, while in most cases the issuer is the debtor. As investments, bonds basically offer two forms of income: interests payments from the issuer and price increases.

A bond is a major loan divided into partial sums which conform to one and the same legal basis. The lender is entitled to redemption of and interest on the provided capital in accordance with the conditions pertaining to the bond.

Usually, the debtor is liable with the entirety of its assets. The debtor uses bonds as a means to acquire long-term capital that is cheaper than that which could be obtained through bank loans. The investor has an easily realisable capital investment that is stable in comparison to equity securities.