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ACE is one of the largest global precious minerals

mining companies in Africa

   OTC Bonds / MTN of ACE


     ACE OTC Bonds Processes of  capitalisation              



UBA bank


The provided information discusses corporate bonds, their exchanges are over-the-counter (OTC) markets, and the process involving ACE's Euroclear account for bond settlement. Let's break down the key points:

1. **Corporate Bonds**: Corporate bonds are debt securities issued by private and public corporations to raise capital for various purposes. These bonds typically offer higher yields compared to government bonds but come with higher risks.


2. **OTC Settlement**: Most corporate bonds are settled via OTC rather than being listed on exchanges. OTC settlement allows for flexibility in transactions and does not involve the rules and oversight of major exchanges.


3. **Liquidity**: Liquidity in the OTC corporate bond market can vary. Liquidity is essential as it enables ACE to buy and sell bonds before maturity at fair prices. Liquidity is influenced by factors like the creditworthiness of the issuer.


4. **Credit Risk**: Corporate bonds face credit risk, which arises when the issuer cannot make interest or principal payments. Credit ratings assess the creditworthiness of the issuing firm and help investors gauge this risk.


5. **Call Risk**: Call risk occurs when an issuer decides to redeem the bond before its maturity date. This can result in investors having to reinvest their funds at potentially less favorable terms.


6. **OTC vs. Exchange Trading**: Financial market transactions can occur either on organized exchanges or OTC. OTC trades are directly negotiated between two parties and are not subject to exchange rules. They cover various asset types, including commodities, equities, and debt instruments.


7. **Derivatives**: Derivatives are financial contracts that derive their value from an underlying asset. Examples include futures contracts, forward contracts, options, and swaps. Derivatives play a significant role in global financial markets and are used for various purposes, including hedging and speculation.


8. **ACE's Euroclear Account**: ACE use a service related to corporate bonds, possibly involving the use of its own Euroclear account and custody account with UBA. Euroclear is a financial services company that provides settlement and clearing services for securities transactions.


9. **Process**: The process for bonds settlement  involves providing the ISIN (International Securities Identification Number) for due diligence, establishing a monetization overview, issuing a commercial buy and sell contract, and delivering the bond via Euroclear for desk-to-desk trading. This process is designed to facilitate the exchange of corporate bonds.


In summary, corporate bonds are a way for ACE to raise capital, and they are often exchanged on private OTC markets, It's important  to be aware of the risks associated with corporate bonds, such as credit risk and call risk, when participating in such markets.

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