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Financial analysis | Contributor © John Petroff |
| No rated * * * * * | Resize -A +A |
As for all securities, it is necessary to read all the clauses of a bond indenture. There may indeed be some additional benefits that the issuer has promised in order to make the bond more attractive, such as put or call provision, conversion right, or other protection. For conversion rights, the addition to value depends on common share value discussed later in Section D of this chapter. If a warrant is attached to a bond, the value of the warrant is separate from the bond and is determined in a similar fashion to that of options, see Section E of this chapter. When a purchase of a bond with an attached warrant is considered, the value is obviously the sum of the two combined.
| There are no long term corporate bonds in Russia in 2000. Consequently, there is no need for any rating system of corporate issues. Because of the size and prestige of some large Russian companies (such as GasProm for instance), it seems likely that as soon as inflation rates come down to some manageable level, these companies will find it convenient and cheap to raise needed funds by issuing bonds. These bonds will have to be rated by some competent independent analytical organization to give the public confidence. There are a few government notes with maturities beyond one year. These are priced with the same method as for US issues. However, contrary to US municipal issues that are rated, Russian issues are not. |
See review question Q-3A2.1
See research assignment R-3.4.
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