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Straight bond offerings will generally incur the lowest direct issue costs as a percentage of gross proceeds.
What is a "straight bond"?
A straight bond is a bond that pays interest at regular intervals and, at maturity pays back the principal that was originally invested. A straight bond has no special features compared to other bonds with other options. U.S. Straight bonds include the government's own Treasury notes. A straight bond is a standard bond that requires the issuer to pay both the principal and regular, fixed interest when it matures. Also known as a "bullet bond," these issues do not have any special features, embedded options, floating interest rates, or exotic covenants. This makes pricing straight bonds straightforward, but these bonds are still subject to interest rates and default risks that can harm investors.
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