Glossary

Repurchase in the open market

An issuer can repurchase a bond in the open market as a way of paying back its debt.

Issuers will often buy back their own bonds on the stock exchange when they have adequate funds available. A repurchase on the open market can also be a lucrative strategy if the bond is listed below par, i. e. if the current price is lower than the redemption price.

By repurchasing its own bonds, an issuer lowers its debt/equity ratio, which in turn enhances its creditworthiness.

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