Corporate Bonds: Rapid Fire

What this video covers

• Why Equipment Trust Certificates (ETCs) are among the safest corporate bonds despite the complicated name, and how serial maturity matches principal paydown to equipment depreciation
• What debenture really means (unsecured, not risky), and why a AAA debenture can be safer than a secured bond from a weak issuer
• The exact priority of claims in corporate bankruptcy: secured bondholders, senior debentures, subordinated debentures, preferred stock, then common stock
• Why subordinated debentures pay higher yields, and the critical distinction that they still rank above all stockholders in liquidation
• How zero-coupon bonds produce maximum interest rate risk with zero reinvestment risk, and why phantom income from original issue discount (OID) accretion makes them unsuitable for taxable accounts
• Why income bonds (adjustment bonds) can skip interest payments without triggering default, and what it means that they trade flat without accrued interest
• The investment grade cutoff ratings (BBB- or Baa3), why step-coupon bonds are often called at rate increases, and why high yield means junk not quality