An analysis of debentures mortgages and long term loans

Bond Definition of Debenture A debenture is a debt instrument used by the companies to raise money for medium to long-term at a specified rate of interest. It consists of a written contract specifying the repayment of the principal and the interest payment at the fixed rate.

An analysis of debentures mortgages and long term loans

A bird in the hand is worth two in the bush. Whatever you get monthly can be re-invested again as you like. That is why you see effective yield of The assumption here is that you re-invest monthly interest again in an instrument yielding This is more of a theoretical number because you might not get similar yielding instruments over the next six years.

In the last option you receive no interest over the tenure of the bond. You get a lumpsum amount back at end of 72 months 6 years.


Effective yield is again Because you invest Rs. It effectively works out to investing Rs. This is particularly risky as compared to the other two options. Theoretically, if there were a default in the third year, then the borrowers under the last option will not have got a single Rupee in the three years.

They raise funds from banks, private parties, public debenture holders and lend the money onward. Net non-performing assets NPAs are 0. Mortgage finance is an area with high competition and an inherently risky business area.

An analysis of debentures mortgages and long term loans

IIFL Finance is also financing real estate developers. The Prospectus does not carry a breakup of Loan Against Property. I would surely like to know this before I commit money to this issue.

Why is this important? Because most properties or construction projects cannot be easily liquidated when a customer defaults.

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Think of a time like when the economy seemed to have come to a standstill. A bank or an NBFC might have security on a property when they have given a loan. Security is on paper. To recover money, steps need to be taken to liquidate the asset.

There might not be buyers at a good price in the market if real estate slumps. The same is the case with gold loans.

An analysis of debentures mortgages and long term loans

These make up the next biggest chunk of their business. Gold loans have come under scrutiny by the RBI.A debenture is an important source of raising money for long-term financial needs of the company.

Though it raises a considerable proportion of the capital, it is not the only source. Bank loans, equity shares, and bonds are also used by companies to raise money. The maximum number of items you can export is 3, Please reduce your list by using the filtering tool to the left.

Balance Sheet Components The balance sheet is the financial statement that reports the assets, liabilities and net worth of a company at a specific point in time. Capital Market: Definition: The means by which large amounts of money (capital) are raised by companies, governments and other organizations for long term use and the subsequent trade of the instruments issued in recognition of such capital.

Chapter UNIFORM DEPOSITORY ACT. Uniform depositary act definitions. Except as otherwise provided in sections , , , and of the Revised Code, as used in sections to of the Revised Code: "Active deposit" means a public deposit necessary to meet current demands on the treasury, and that is deposited in any of the following.

Loans involving family & friends. Love and loans. Has a family member or friend asked you to be a 'co-borrower' or guarantee a loan for them? Before you say yes, think carefully - you could lose not only your money, but valuable assets such as your house or car.

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