Since they are not always publicly or actively traded, bonds are often not straightforward to appraise. Yet understanding the fair value of bonds is important for a variety of reasons. Companies strategize to issue bonds at rates that are competitive in the market, potential investors aim to weigh the rate of return to determine the worthiness of the investment, dealmakers seek to understand the value of all assets considered in a transaction, and investment portfolios report the value of bonds to investors. AccuVal digs deeper to identify trades of like instruments and examines their risk characteristics and trading trends to produce well-supported bond valuations.
Bonds are issued by many different entities including corporations, the government or municipalities. Regardless of who is issuing it, a bond issuer's goal is to raise capital by issuing debt at a rate that is competitive in the marketplace. Once a bond has been issued, it may be traded publicly or privately. Valuation of bonds traded on a public market is seemingly very clear-cut; however, even these bonds must be analyzed to determine whether the volume of trades is sufficient to support a fair value of bonds in accordance with accounting guidelines. If the market is thinly traded or private, a different approach for bond valuations must be pursued.
If these are your circumstances, turn to AccuVal. We first ensure we understand the type of bonds being considered and then execute two primary approaches to determining bond value: income and market approach.
Bond valuations always need to consider the specific terms of the bond. AccuVal is expert at understanding the underlying factors that influence the valuation of bonds at issuance. We routinely consider aspects like the priority and voting rights of the bondholder and the creditworthiness, financial projections, outstanding debt and underlying asset base of the company issuing the bonds and their impact on the bond value.
AccuVal’s strong roots in providing appraisals for the lending industry uniquely equips us with the experience needed to produce an independent appraisal report grounded in real market dynamics. Our bond valuations can be relied upon because they are backed by information gathered from the industry's top data resources and analysis conducted by experienced and certified appraisers.
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