Corporate Bonds or Security Token Offerings: Which is the better fit for your company?

TALLINN, Estonia - Oct. 25, 2019 - PRLog -- Corporate Bonds

Let's start from the beginning. Corporate bonds, as you may well know, is a tried and tested way for corporations to issue debt security to be sold to investors. Backing the bond is the payment ability of the company, money earned or to be earned from future operations. In some cases, a company's physical assets are even used as collateral. Is this really the best way to go about it, though?

Corporate bonds are actually considered to have much higher risk than your standard government bonds. They're issued in blocks of $1,000 in par value with a standard coupon payment structure. As investors own the bond, they receive interest from the issuer until the bond matures which, at that point, they can then reclaim the face value of the bond. But what if they opt to sell their bonds before they mature? Well, that's when the corporate bond's provisions kick in. However, we must look back to its original purpose in that these corporate bonds are a form of debt financing. They are one of the company's major source of capital, along with equity, bank loans and lines of credit. Generally speaking, you really wouldn't want investors to pull out before the bonds have served their purpose, but it's their right. So what other options do you have? Asset-Backed Securities? They're quite similar but that's a topic for another time. Now, I wish to take you forward — to the age of STOs!

Security Token Offerings

Security Tokens are now ablaze in the industry as a tradable blockchain-based asset which is being launched in an adherence to strict regulations (so no ICO shenanigans). Security Token Offerings are the latest fundraising strategy which are now becoming the best course of action for startups to make use of in raising funds. For this year alone, STOs have already raised a whopping $380 million so far, and the year hasn't even ended!

For more information, please visit us at https://fiatxs.com