Debt securities include any securities that formalize the relationship for the issuance of a loan. As a rule, debt securities involve the receipt of a fixed income by the acquirer, as well as subsequent redemption by the issuer.
Debt securities are a special type of securities that are an expression of a debt obligation between the issuer and the buyer of these securities. As a rule, debt securities are issued for a certain period, after which the issuer undertakes to redeem them. During the indicated period, the buyer (holder) of such securities usually receives a fixed income for the use of borrowed funds, paid as the purchase price. The most common types of securities are bonds, bills of exchange, savings certificates, government treasury bonds.
General characteristics of debt securities
Debt securities are distinguished by the following features:
1) a bill of exchange is the simplest type of debt security, which is issued in a strictly defined form, has a number of mandatory details and expresses the obligation of the debtor (drawer) to pay the holder of this security the amount specified in it at the end of the bill of exchange;
2) bonds - debt securities, which express a debt obligation, are redeemed by the issuer after a certain period of time, and during the period of their validity give the right to receive dividends from him in the declared amount;
3) state treasury bonds - debt securities, the features of which are completely identical to the characteristics of bonds, however, this type is issued by the state and provided with budgetary funds;
4) savings certificate - a debt security issued by credit institutions and entitling buyers to receive interest during the period of its validity, after which the invested funds are returned.
Features of some types of debt securities
The most widespread among individuals and organizations are bonds. These securities are often issued by legal entities to attract investment. As a rule, bonds are unsecured, but in some cases their issuer provides certain property and other guarantees as collateral. Also, recently, savings certificates have been gaining popularity, the right to issue which only banks have. The main feature of savings certificates is that their recipients usually receive a higher income than on a bank deposit. But the risks associated with these products are not insured by the state, therefore, in case of bankruptcy of the bank, the holders cannot count on receiving insurance payments.
