A bond holder receives a stream of interest, or coupons for owning the bond and gets back his principal on maturity of the bond.
Fine, but for the sake of the economy, better a borrower than a lender be.
Many worry that the government will become the most attractive lender and borrower in the market -- crowding out others in the private sector.
Debt, it turns out, can be a liability for the borrower and the creditor, especially when it goes bad.
In view of the above, we, The Export-Import bank of China, hereby issue our unconditional and irrevocable Guarantee No. in favor of the Beneficiary in the amount not exceeding USD3,270,000, representing l5% (fifteen percent) of the Commercial Contract Part 1 & 2 price.
So you see, after paying myself, the pressure to pay my taxes and the other creditors is so great that it forces me to seek other forms of income. The pressure to pay becomes my motivation.
Borrower would thus tend to offer better terms in order to persuade lenders to switch over into the long market.
And Europe is now seeing the introduction of “covenant-lite” loans, which offer little protection to lenders if the borrower's financial position deteriorates.
A contract for loan of money between natural persons becomes effective at the time the lender makes the loan amount available.
A certificate in writing signed any Manager or other duly authorised officer of the Lender stating the amount at any particular time due and payable to the Lender under this loan facility agreement shall conclusive evidence against the Borrower.