Question 1

What is an ISIN number?

Accepted Answer

ISIN (International Securities Identification Number) is a unique 12-character code that identifies a specific bond or security. It ensures there’s no confusion between different issues and helps you verify details on NSDL, CDSL, NSE, or BSE.

Question 2

What does the security name mean?

Accepted Answer

It’s the official name of the bond as registered with the depository or exchange — typically including the issuer’s name, coupon rate, and maturity year.

Question 3

What is the date of issuance?

Accepted Answer

It’s the date when the bond was originally issued by the company to investors. Interest calculation starts from this date for all subscribers.

Question 4

What does face value mean?

Accepted Answer

Face value (also called par value) is the amount the issuer agrees to repay per bond unit at maturity — usually ₹1,000, ₹10,000, or ₹1,00,000. All interest and redemption calculations are based on this amount.

Question 5

What does Nature of a bond mean?

Accepted Answer

The “Nature” of a bond indicates whether it is Listed Secured or Listed Unsecured. A Listed Secured bond is backed by specific assets of the issuer and is traded on a recognized exchange, offering higher security and transparency A Listed Unsecured bond is also traded on an exchange but isn’t backed by any specific collateral, relying solely on the issuer’s financial strength.

Question 6

What does seniority indicate?

Accepted Answer

Seniority defines the repayment priority if the issuer faces financial distress: Senior bonds are repaid first. Subordinated (junior) bonds are paid only after senior obligations are met. Higher seniority generally means lower risk.

Question 7

What does mode of issue mean?

Accepted Answer

It shows how the bond was offered to investors: Private Placement → Offered to a select group of investors, often with higher ticket sizes. Public Issue → Open to all investors through an exchange-based subscription.

Question 8

Who is the debenture trustee?

Accepted Answer

A debenture trustee is a SEBI-registered entity that safeguards investors’ interests. They monitor the issuer’s compliance, ensure timely payouts, and act on behalf of bondholders in case of delay or default.

Question 9

What does the current rating represent?

Accepted Answer

It’s the latest credit rating assigned by a rating agency, reflecting the issuer’s current repayment capacity and risk level. Ratings may change over time based on the company’s financial performance.

Question 10

Why is the rating date important?

Accepted Answer

It shows when the current rating was last reviewed or reaffirmed by the agency. Recent ratings are generally more reliable indicators of creditworthiness.

Question 11

What is a term sheet?

Accepted Answer

The term sheet is an official document containing detailed bond terms: coupon rate, maturity date, interest schedule, redemption conditions, and covenants. It’s a legal summary of the bond’s key terms and obligations.

Question 12

What does the rating report contain?

Accepted Answer

It’s the detailed assessment issued by the rating agency explaining the rationale behind the bond’s rating. It covers the issuer’s financials, risks, and outlook — helping investors understand why a bond holds its current rating.

NIIF Infrastructure Finance Aug ’31

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