1. DEBT INSTRUMENTS Ji Young Sung Yonsei GSIS

2. Table of Contents  Debt Instruments -. Big picture of finance market -. Definition -. What are belonged to -. Why do we need they -. Things to discuss in related with debt instruments

3. Finance Market money marketcapital market maturity< 1yr (short term) > 1yr (long term) function Short-term liquidity funding Long-term investment & liquidity funding credit riskLowHigh

4. Debt Instrument  Definition A contractual or written assurance that enables the issuing party to raise funds by promising to repay a lender in accordance with terms of a contract.

5. Debt Instrument  What are belonged to. 1) bonds: borrowing the funds for a defined period of time at a fixed interest rate*.

6. Debt Instrument 2) notes : a debt security usually maturing in one to 10 years. (ex> T-note: a marketable U.S. gov’ debt security, extremely popular investments)

7. Debt Instrument 3) mortgages: secured by the collateral of specified real estate property and that the borrower is obliged to pay back with a predetermined set of payments. 4) leases or other agreements between a lender and a borrower

8. Debt Instrument  Function of Debt Instruments (Why do we need they?) Raising fund easily Providing liquidity

9. Debt Instrument  Things to discuss -. Core features? -. Relationship with current global finance turmoil -. Feasible effects on debt instruments