Fixed-Income Markets for Corporate Issuers

How companies and banks raise short-term money (credit lines, secured loans, commercial paper, deposits, interbank loans and repos), how a repurchase agreement works and what can go wrong with it, and why long-term borrowing looks so different for investment-grade and high-yield issuers.

1. 1. Short-term bank funding: credit lines, secured loans and factoringBank credit lines differ mainly in how firmly the bank promises to lend: the stronger the promise, the more reliable the funding and the more it costs the borrower in fees and covenants.Free13 min
2. 2. Commercial paper, rollover risk and asset-backed CPStrong issuers can borrow short term more cheaply by selling their own unsecured notes to investors, but because the paper is repaid with new paper, investors insist on a bank backup line in case the market shuts.12 min
3. 3. How banks fund themselves: deposits, CDs and the interbank marketA bank earns the gap between what its loans and securities yield and what it pays for funding, and it fills its short-term funding needs from deposits, certificates of deposit, interbank loans, CP and repos.11 min
4. 4. Repo mechanics: repo rate, initial margin, haircut and variation marginA repo is a collateralized loan dressed as a sale and buyback: the cash borrower sells a security today and buys it back later at a higher price, and the gap between the two prices is the interest.Video · 6 min15 min
5. 5. Repos in practice: uses, repo rates, risks and triparty structuresRepos are cheap, flexible secured funding used to finance positions, park cash and borrow securities for shorting, but their very short, uncommitted nature means lenders can walk away exactly when a borrower needs them most.14 min
6. 6. Long-term debt: investment-grade vs high-yield issuersInvestment-grade issuers borrow long term almost on their own terms, while high-yield issuers pay a large issuer-specific spread and accept covenants, security, shorter maturities and patchy market access.14 min