Question

You own a large company and would like to issue bonds for $12 million to pay for the construction of a new manufacturing facility. As a bond issuer, your company will need to

Answer 1

When issuing bonds, a company needs to follow specific steps to borrow money from bondholders. They must decide on the terms of the bond, prepare legal documentation, engage an underwriter, market the bond offering, and allocate the bonds to investors.

Step-by-step explanation:

As the owner of a large company, issuing bonds for $12 million can be a way to raise funds for the construction of a new manufacturing facility. When a company issues bonds, it essentially borrows money from investors, who are called bondholders. In return, the company promises to make interest payments to the bondholders at a specified rate and repay the principal amount borrowed at a future date.

The company would need to follow certain steps to issue the bonds:

Decide on the terms of the bond, such as the interest rate, maturity date, and denomination.

Prepare the necessary legal documentation, such as a bond indenture or trust deed.

Engage an underwriter or investment bank to assist with the bond issuance process.

Market the bond offering to potential investors.

Allocate the bonds to investors and finalize the bond sale.

Answer 2

Find a bondholder or purchaser.

Step-by-step explanation:

A bond issuer is someone who borrows money, in this example, my company.

In order to being able to financiate the construction of a new manufacturing facility for my company, I would have to find a bondholder (or some ofthem) that would lend me all the money, with its pertinent clauses.

I would have to fill those clauses, perhaps its money returning timeline, some finantial records, etc.