Example of Issuance of Obligations

It is known as bond issues the resource available to capital companies to obtain the resources that are necessary for their needs and projects.

These are documents that guarantee an investment that must be paid in the long term, while for individuals or banks these obligations will generate an amount or percentage of profit.

There are two forms of capital acquisition for bondholders:

• Own funds and
• Foreign funds (loans).

Own funds are the contributions made by members of the company or by new members.

Foreign funds or loans are funds from foreign capital such as banks and individuals. A long-term investment is made in these funds and there is a percentage amount that would be the benefit of those who grant the loan.

For the issuance of these obligations a contract is generally made in which the bondholders grant the corresponding titles.

These titles can be:

• Bearer securities or in the name of the beneficiary.
• Ordinary represented by the assets of the company

Example of issuance of obligations:

The company “todo todo y más S.A de C.V” requires new capital to be able to work in its different branches.

Seeing the shareholders the need for capital and knowing that the company is not in optimal conditions to sell shares, it plans to issue obligations, which would have a profit percentage for the beneficiary of between 3 and 4% annual interest, with the possibility of increasing.

A contract will be made in order to clarify and formalize the issuance of obligations and the benefits that the corresponding beneficiaries will have.