Corporate Finance - Bonds Issue H.W

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Bonds Issue
Corporate organization use security portfolios to represent collaterals. Using repurchasing agreements, the company can sell the bonds with an agreement to buy them back at a price agreed upon by the parties.
Seniority of the bonds refers to the repayment order of the bonds in case of making a sale or going bankrupt. It can be in the form of preferred stock or debt. The main advantage of these bonds is that they get the first consideration in case the company goes under and is not in a position to pay all its debts.
Sinking funds are monies set aside by companies that can be used to buy back bonds at the preferred time. To the investors, sinking funds make the bonds of a company more attractive as the chances of defaulting reduce considerably.
Call options with specified time and prices, present the investor with the option of hedging long positions, without eliminating the risk. To the company, they have the upper hand of speculating. However, the investor has the risk of having a call option that may end up worthless if the time expires while the securities remain at the same point.
Deferred bonds with specific prices ...