Syndicate
Reimbursed Debentures
According to the type of reimbursement, debentures can be reimbursed by its nominal value or a higher price. When the reimbursement value is higher than the nominal value there is a reimbursement fee. This reimbursement fee is estimated by the difference between the nominal value and the reimbursement value.
In some cases, debentures can be turned into stocks. This way, the issuing entity offers the investors the possibility, if wanted, of turning their debentures in stocks. Thus, the creditor can become a stockholder of the company issuing the loan.
A similar situation occurs with the exchangeable debentures. In these, then issuing company offers the buyer of the debentures the possibility to exchange them for previously issued stocks (old stocks) and that are in the portfolio of such issuing company. On the contrary, convertible debentures are exchanged for new issuance stocks (new stocks).
Frequently, debentures include the so called warrants to make them more attractive to investors. Warrants can be sold in the stock market apart from debentures.
In the stock market, a group of debentures can be divided in sub-groups based on the activity the companies that have issued this kind of debt perform:
- Oil
- Electric energy and gas
- Basic metals
- Cement and construction materials
- Chemical industries
- Metal-mechanic
- Food, drinks and tobacco
- Textile
- Paper and graphic arts
- Rubber and plastic materials
- Construction
- Transport and communications
- Financial institutions that include the banks, savings entities, financing entities and issued debt mortgage credit societies
- Real estate