University of Twente Student Theses


Designing a corporate bond

Smit, T.O. (2016) Designing a corporate bond.

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Abstract:The goal of the thesis was to design a corporate bond for a non-listed firm to attract additional capital from the market. The result of the research is a bond with related credit rating, conditions and prospectus. The market interest rate is historical low and therefor the investors are looking for alternatives to invest their money. The banks are reluctant to provide credit to SMEs. Banks usually only grant credit if there is already long-term debt included in the company. These two factors have lead to an increasing number of non-listed corporate bonds. A credit rating model is built to approach the credit rating of the bond and to identify all the different kinds of risk. The main components of the model are the profitability (rate of return on capital), the solvency and the liquidity. The model is completed with several other variables that influence the risk of the bond.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:83 economics
Programme:Industrial Engineering and Management MSc (60029)
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