Bond Market

Subsidiary DLC for Capitalism Lab
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kmarano
Posts: 14
Joined: Mon Aug 25, 2014 11:53 pm

Bond Market

Post by kmarano »

I think this is a really interesting topic. And could be a great new addition to the game. As funding for poor performing or new companies can be difficult to come by. Conversely, cash flow for a well performing company often sits unused unless buying stock or land.

I would envision a market place similar to the Stock Market, where companies in need of cash could determine the bond amount, length and interest rate they are willing to pay. (it would need to be at or above current rates). A rating agency would need to assign a rating based on the company’s ability to pay. A well performing company with excess cash looking to invest could look over the bonds in the market and choose a bond amount, length, interest rate, and credit rating they are comfortable with. Additionally, I think it would be interesting if the parties could decide on either a fixed rate or floating rate.

Once the foundation of the above market is created, the Investment Bank in each city could be utilized. The Investment Bank could act as a clearing house of sorts providing an additional market for companies engaged in the Bond Market to perform Interest Rate and Credit Default Swaps.

I'll quit rambling now and see what others think.
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