Debt Securities

A subset of financial securities.

Short-term debt (less than one year to maturity)

• Referred to as a “money market” securities
• Typically do not have periodic interest payments
• Can be secured (e.g., bankers acceptance) or unsecured (e.g., commercial paper)

Long-term debt (greater than 1 year to maturity)

• Term Loans - arranged privately with banks or other parties
• Bonds - arranged in the capital markets
• Promise to pay periodic interest payments
• Can be secured or unsecured
• Indirect control only through debt contract terms (covenants)