Is it Possible to Distribute Profits?
It is beneficial for individuals to pay attention to three specific points regarding bonds before purchasing them. Nominal values represent the total amount of money that all investors will receive at the maturity of bonds and debentures. In this context, bonds can be issued with fixed or variable interest rates, and the interest rates are freely determined by the issuers. The principles regarding the follow-up and the interest rates to be paid on bonds, as well as specific payment conditions, are determined by the issuers, provided they are clearly stated in the prospectus and circular. Maturity transactions refer to all dates on which principal and final interest payments will be made, and the maturities of bonds are generally determined freely, not being less than approximately 1 year. The principal of these bonds is paid either in full at maturity or in installments during the term. It is possible to distribute profits to bondholders, provided there are provisions in the articles of association of all issuers or in any specific legislation.
Investment Returns and Risks
Live stock market tracking and profit sharing from publicly offered bonds are detailed in the prospectus and circular according to specific principles. All issuers must choose one of several principles for determining the profit share to be distributed to bondholders. These include receiving interest and an additional profit share, or receiving a profit share without any predetermined interest. The capital that bondholders lend to a company constitutes foreign capital. In this regard, bondholders are long-term creditors of the issuing entity. At this stage, bondholders have no other rights over the company's assets beyond their claims. They also cannot participate in the company's management. Live stock market tracking and in these systems, bondholders' interest must be paid from the companies' gross profits before any other distribution. The legal relationship between the bondholder and the company terminates at maturity. Furthermore, these bondholders do not share in the profit and loss risks of the issuing companies; even if the companies incur losses, they receive their principal and interest amounts on time when due.
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