Capital Market Instrument Financing
Typically, corporations issues such financial instruments to
the investment market to raise the desired financing amount to
finance corporate activities and corporate growth as well to pare
down existing financing such that the overall gearing position
of the corporation can be improved.
Straight debt issuance in the local context comprise short term
commercial papers, medium term notes and longer term bonds or
in todays more fashionable description, Sukuks. Hybrid debt
instruments comprise convertible and exchangeable debt securities.
Holders of convertible debt securities are entitled to change
the debt paper into shares in the issuing corporation.
Holders of exchangeable debt securities entitle the holders to
change the debt papers into shares in companies held by the issuing
corporation. Asset backed securities refer to financial instruments
that entitle holders to an interest in an underlying pool of assets
that had been passed on to a special purpose vehicle created through
a corporate scheme.
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