Introduction to the Fixed Income Markets

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This introductory half-day course provides a broad introduction to the bond markets. We examine the way the bond markets function whilst demystifying the terminology. We review the features and coupon structures of the bond products, the relationship between government and corporate bonds and explain the concept of credit spreads. Additionally, we will explore how fixed income products fit into the investment portfolio as well as how investment professionals analyse and price the products.

Key Learning Objectives

• Gain a deeper understanding of global fixed income markets
• How bonds work and the terminology used in the bond markets
• Provide a full understanding of the mechanics and cash flows of bond
• Learn the main concepts of bond pricing and how they work in practice
• Understand the market conventions for quoting price and yield
• Define the concept of 'spreads' and why they are important in the bond market
• Identification of the main risks associated with bond markets

Start: 9:30

Fixed income investing – definition and key features: what is a bond?

• Bond market terminology and jargon
• Coupon structures – fixed vs floating
• Government vs. corporate bonds
• Seniority ranking of debt securities when default occurs – who gets paid out first
• Credit spreads – what they are and what they tells us
• The risk of investing in bonds

Credit ratings

• The role and significance of the rating agencies and their rating scales
• The ratings methodology and process
• ‘True’ vs. market-implied spreads – intuitive explanation of discrepancies between ratings and market spreads

Coffee Break: 10:50 - 11:10

Pricing and execution

• Investing in a bond – par, premium and discount pricing concepts
• Clean and dirty prices – accounting for the accrued interest
• Bond quotations – the price, the yields and the different spreads used
• The price/yield relationship
• Overview of

First principles of bond valuation

• Valuing a bond as the equivalent to the sum of all its discounted cash flows

End 12:30

This half day course is relevant to those who are new to the investment industry or those looking to improve their knowledge and understanding of the fixed income markets.

• Investment professionals, investment administration and operations
• Client services and sales and marketing
• Risk management, legal, audit and compliance
• Finance and accounting
• HR and learning and development
• IT and software developers

Russell Hammerson

Russell Hammerson is an experienced banker working with structured products and exotic options over 15 years.

Russell started his career in the fixed income trading division at Chase Manhattan in 1986. After having graduated from the Chase nine-month advanced financial risk analysis programme, he was seconded to the Chase insurance banking division for a year. Taking his insurance expertise with him, he later moved to Citibank to work in the financial engineering division, structuring fixed income and equity products for institutional investors.

From Citibank, Russell moved to Bear Stearns to help set up the newly established equity derivatives group as associate director responsible for marketing and structuring of European products prior to becoming head of structured products at Commerzbank.

Before moving into the technical training arena, Russell ran the structured product group at Banque Nationale de Paris followed by Bankgesellschaft Berlin, London, in a similar role as head of engineered products and international new issues and director of the London Management Committee.

Russell has been training all areas of capital markets since 2001. At BG Consulting (now trading as ZISHI Cornerstone), he specialises in structured products, equity and credit derivatives and exotic options.

IA Member £395.00 +VAT
Non-Member 545.00 +VAT

Pay using a credit card online, or if you wish to be invoiced please email your full details to: Training@theia.org

PLEASE NOTE: Full payment for the course must be made prior to the course commencement date.

• Any cancellation must be made in writing.
• For all cancellation received 15-30 days prior to the course start date, 50% of the course fee is still payable.
• No refund is given for a cancellation made 14 days or less prior to the commencement of a course.
• Transferring from one course to another is treated as a cancellation.
• You can substitute one delegate for another at no additional cost. In this instance, please give two business days’ notice.

Hybrid Training Courses:

Hybrid deliveries of our training allows participants on our courses the option to attend in-person here from our offices at Camomile Court, or you can attend virtually via MS Teams.

Please be advised a training course could change from hybrid delivery to solely virtual delivery. In such an event, we will inform delegates at least one week prior to the course delivery date.

There are a limited number of in-person spaces available on this course and this will be allocated on a first come first served basis.