Key features of debt capital markets

What are the debt capital markets?

If an entity wishes to raise money (ie 'capital'), it usually has three main options available to it. It can:

1. •

   (in the case of a corporate only) issue shares (to raise share capital)—this is usually done through the equity capital markets

2. •

   borrow the money from an institution such as a bank (to raise loan capital)—this is done through the loan markets (see Banking & Finance topic: Types of lending—overview), or

3. •

   issue debt securities

Where an entity raises capital by issuing debt securities, it does so in the debt capital markets.

For more information, see Practice Notes: Key features of the debt capital markets, Introductory guide to the debt capital markets and Issuing debt securities—key documentation.

Loans versus debt securities

Loans come in a wide variety of forms. A simple and very common type of loan is an overdraft. Other common types of loan in commercial financing are term loans and revolving