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CORPORATE BOND ISSUE COSTS
Abstract
Corporate bonds represent a suitable source of financing capital intensive projects and activities. The key factor determining the effectiveness of a corporate bond issue and affecting its success is the cost of such a corporate bond issue. The paper authors aim to identify expenses relating to the issue of corporate bonds both in the classic and mezzanine forms and, subsequently, quantify their amounts for the current conditions in the Czech economy. The paper defines two basic components of corporate bond issue costs, which are costs directly relating to issuance, so-called issuance costs, and also the costs incurred during the life cycle and in connection with repayment of the given issue, so-called issue life cycle costs. Their individual cost items are specified and subsequently quantified with respect to the current conditions in the Czech Republic and the classic and mezzanine form of corporate bonds.
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References11
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