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FINANCIAL MARKET COURSES

Bond Markets - Issuing & Trading

How can a borrower (issuer) ensure that its bonds raise sufficient funds at the best price? How are those bonds distributed amongst investors? As described in this course, these two elements are addressed in different ways across bond primary markets.

 

The course also looks in detail at secondary market trading and settlement practices. Trading is largely over the counter (OTC) rather than exchange-based, with electronic marketplaces becoming increasingly more important in recent times.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Explain the difference between single-price and multiple-price auctions used for issuing government bonds

    Describe the pricing and distribution practices used by bond underwriting syndicates

    Outline how the nature of bond secondary market trading has changed in recent times

  • COURSE OUTLINE

    Topic 1: Bond Auctions

    Auction vs. Underwriting

    o Comparison of Approaches

    Auction Administration

    o Calendars & Announcements

    Auction Types

    o Multiple-Price Auctions

    o Single-Price Auctions

    o Comparison of Auction Methods

    Competitive vs. Noncompetitive Bidding

    Single-Price Auction Example (US T-Note)

    Multiple-Price Auction Example (UK Gilt)

    Reopenings & Benchmarks

    Role of Primary Dealers

    Topic 2: Bond Underwriting

    Underwriting & Syndication

    New Issues Process

    Syndicate Structure

    o Lead Manager (Bookrunner)

    o Co-Lead Manager

    o Co-Manager

    o Selling Group

    o Syndicate Structure Example

    Pricing

    o Bought Deals

    o Book-Building

    Pots

    Fixed Price Reoffer (FPR)

    Underwriting Fees

    Cost of Debt

    Why Join a Syndicate?

    Private Placements

    Topic 3: Bond Trading & Settlement

    OTC Market

    Voice vs. Electronic Trading

    Changes to the OTC Dealer Model

    Settlement

    o Global Bond Format

    o Settlement Risk

    Bond Funds & Bond Indices

  • PREREQUISITE KNOWLEDGE

    Bond Markets – An Introduction - View Now

  • ESTIMATED COMPLETED TIME

    75 Minutes

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