The following Banking & Finance practice note produced in partnership with Shruti Dusaj and Simone Bono of Freshfields LLP provides comprehensive and up to date legal information covering:
Investment grade (IG) bonds refer to debt securities that carry an IG rating, which is anywhere from BBB- and higher on the S&P and Fitch scales and Baa3 and higher on the Moody’s scale (for more information on credit ratings see Practice Note: Credit ratings). IG issuers are typically large blue-chip corporates and often companies whose equity securities are listed on a major stock exchange. Other than sovereign debt of developed economies, IG securities are frequently seen as one of the safest types of income producing investments. However, because IG bonds are considered safe investments, the yields are lower than those of high yield (HY) bonds. Many institutional investors and pension funds have policies and mandates that require them to limit their bond investing to IG bonds or government obligations.
As a broad term, HY bonds are refer to all bonds of issuers that carry a rating that is below IG rating. HY bond issuers may be public companies that do not carry (or at one time did and have subsequently lost) an IG rating, private companies or acquisition vehicles set up to finance leveraged buy-outs. The HY bond investor base may overlap with the IG bond institutional investor base (such as mutual funds and pension funds), but also frequently includes hedge funds,
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Defects liability period and rectification of defectsIt is common in construction projects for defects to manifest or appear in the works. Most construction contracts require the contractor to return to site to rectify (also known as ‘make good’) defects which arise or are discovered during a
Commercial Property Standard Enquiries (CPSEs) are industry standard pre-contract enquiries used in commercial property transactions. CPSEs are endorsed by the British Property Federation and are free to use. The CPSEs include specific environmental enquiries at enquiry 15 and there are several
Financial Conduct Authority—Principles for Businesses (PRIN)This Practice Note explains the Principles for Businesses (PRIN) set down by the Financial Conduct Authority (FCA). The Principles form part of the FCA’s High Level Standards set out in the FCA’s Handbook. The Principles are a general
Public inquiry procedureThe procedure by which a public inquiry is conducted will vary significantly from one inquiry to the next. Even for inquiries established under the Inquiries Act 2005 (IA 2005), the associated inquiry rules are not particularly prescriptive as to how they ought to be
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