Question 1) : Is there any reason for a company to ever tap the loan from the bank?
Also I found the interest rate by taking loans from bank is higher than issuing a bond. .... If the interest rate of a bond is lower, then I can't see any reason for a company to ever tap the loan from the bank.
Yes, because I usually borrow money from the bank I own, giving me an effective interest rate equal to the deposit rate regardless of my company's credit rating.
There is a reason: bank loans can be paid back at any time without penalty. Other players may buy your bonds and then you have no way of extinguishing them. If your credit rating improves, you can pay back the bank loan at par but you will have to buy back the bonds at a premium to the level at which you originally sold them. In the case of bonds, an improving credit rating creates benefits for the investor instead of the issuer during the life of the bond.
In my opinion, bonds in the game should have a minimum tenor of 3 years and minimum issue size of $250 million. In real life, most high yield bonds are issued for a period of 7-10 years. Many investment grade corporate bonds are issued for periods of up to 30 or even 100 years, albeit most have shorter durations.
I also think corporate loans should have floating rates (i.e, global interest rate + spread) instead of fixed rates.
Finally, I think that the high yield bond new issue market (for BB rated and below) should close up during very bad economies and very low rated bonds shouldn't be able to be issued during Depressions/Crises. That's informed by what happened to these markets during the financial crisis.
I haven´t been able to peek (yet) at the banking dlc.
I assume banks are treated as intermediaries between "depositors" and "borrowers" ?
Then, whose job will be to monetize one´s assets? We need the generic in-game bank.
Things aren´t getting worse; our information is getting better!
Question 1 yes, when owning a bank, I can take loan from my bank and actually paying interest to myself. However this is the only sensible case I can think of.
Related to Question 2, I think it might make more sense to let bank to revoke loans to corporate with certain amount of penalties. Some times you can clearly see a firm's operating profit can't make up its loan interest but you can do nothing but watching your money gone eventually.
