Product

Corporate Bond

Corporate Bond is as a debt instrument issued by a company that aims to mobilize the fund by loaning. In general, the bondholders are creditors who have been guaranteed to receive the principal and interest in the specific date (Maturity date). But the bondholders will not be entitled to make any decisions on the company's issue as holding common shareholders

Benefits of investment in corporate bond

Fixed income (Fixed interest rate) The bondholders will receive a return on the form of interest at the fixed rate, which investors are able to estimate the revenues and plan the financial status due to the income is guaranteed in terms of the payment amount and duration.
Principal Investing in bond is same as saving money for the future (savings) due to the low-risk financial instrument. More, each bond has its maturity date and bondholders are in the status of creditors of the issuers. Therefore, when reaching the maturity date, the bondholder shall receive a principal.
Right to claim As bondholders are creditors, the shareholders are the owners. As a result, creditors will be entitled to a claim against a securities issuer before the owner. An issuer must pay interest to a bondholder before paying dividends to common shareholders. And, in the case of bankruptcy, the company must sale the company’s property and pay to its bondholder; then, the remaining amount will be paid to the common shareholders.

There are 2 characteristics of bonds:
- Government Bond: Issued by the government
- Corporate Bond: Issued by companies (Corporate bond was never issue through LSX yet)

Major Differences between Common Stock and Bond

Basics for comparison	Common Stock	Bond
Basics for comparison	Common Stock	Government Bond	Corporate Bond
Instrument type	Equity	Debt	Debt
Owners	Shareholders	Bondholders	Bondholders
Issue by	Companies	Government	Companies
Return	Dividend	Interest	Interest
Claiming priority	Low	Hight	Hight
Voting right	Yes	No	No
Risk	High	Low	Low
Returned guarantee	No	Yes	Yes

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