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Debt capital raising is a process by which companies raise funds by issuing debt securities to investors. Debt securities are financial instruments that represent a creditor’s right to receive repayment of the principal amount, plus interest, at a specified date in the future. Companies can use debt capital raising to finance various activities, such as expanding their operations, acquiring assets, or paying off existing debt.

The debt capital raising process typically involves two parties: the issuer of the debt securities and the investors who purchase them. The issuer can be a corporation, government, or other entity that wants to raise funds. The investors can be individuals, institutions, or other entities that are looking for a way to invest their money.

Debt securities come in different forms, such as bonds, notes, and debentures. Bonds are the most common type of debt securities and are usually issued by large corporations and governments. They typically have a maturity of 10 years or more and pay a fixed interest rate. Notes are similar to bonds but have a shorter maturity period of less than 10 years. Debentures, on the other hand, are unsecured debt securities that are backed only by the creditworthiness of the issuer.

The debt capital raising process starts with the issuer preparing a prospectus that describes the terms and conditions of the debt securities being offered. The prospectus includes information about the issuer, the purpose of the debt capital raising, the terms of the securities, the risks associated with investing in the securities, and other relevant information.