Securities and "Bonds"
The Civil Code defines a security "document confirming the existence of a contractual relationship between its owner and issuer" has the rights of the owner arising from that contract." The issuer here means the legal entity that issued the security. In other words, a legal entity (issuer) borrows money paid by a person who buys a security to expand its business and buys a security for a certain period of time (3 months, 6 months or once a year). Paying a fixed interest to the person receiving the security. This security is written off after a certain period of time in the manner specified in the decision of the issuer on the issue of securities, and its value is reimbursed to the person who received the security. The type of security mentioned above is called a debt security or more specifically a bond. In general, a bond is an investment security and is listed in a separate paragraph of the Civil Code. Naturally, the question arises: how should an investor (a person who buys a security) trust that the issuer can pay a fixed percentage of the bond issued? Of course, an investor who wants to buy a bond should first look at the financial statements of the company that issued the security for the last 3 years and the issue prospectus of the security (a collection of information about the securities and the issuer).
Bonds may also be secured under the Civil Code. The bond is considered secured in 3 cases: secured by collateral, secured by a guarantee, secured by a state or municipal guarantee. The subject of collateral for secured bonds may be investment securities, real estate certificates, movable property registered in the real estate and official register, or mortgage coverage. If the issuer of the secured bond fails to perform or improperly fulfills its obligation under the bond, the administrator shall investigate the fact of non-performance of the obligation and, upon confirmation, direct the seizure to the subject of pledge.
Who is the manager here? If the bond is issued as collateral, the custodian of the collateral is appointed and acts as the pledgee on his behalf in favor of the bondholders in order to control the compliance of the collateral with the requirements of the legislation and the issue prospectus. The collateral may be an investment company, a central depository or a bank. That is, if the issuer fails to fulfill the obligation, it is directed to the subject of pledge for the fulfillment of that obligation. Bonds secured by the guarantee, the relevant guarantee is provided by the issuer and is kept until the issuer's obligations are fully fulfilled. Government-guaranteed bonds, as the name implies, are government bonds. They are issued by the Ministry of Finance as short-term (91, 182, 364 days), medium-term (1 to 5 years) and long-term (more than 5 years).