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Friday, April 26, 2024

‘Perps’ popular among corporate issuers

Perpetual bonds are generating interest among investors due to the steady and predictable passive income from the scheduled coupon payments.

The capital market in Thailand has launched multiple issuances of perpetual bonds.

With a long-term nature and relatively lucrative returns compared to plain vanilla bonds, perpetual bonds — which are also referred to as “perps” — are increasingly popular among corporate issuers. As a result, it benefits the companies in terms of capital structure management in long-term investment plans.

General corporate bonds normally have fixed interest payments and a redemption date on which their principal will be repaid. In contrast, perpetual bonds do not determine a fixed coupon payment date or…

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