Debt capital markets are often involved in making loans to company or in supporting companies selling bonds out to the public. But why would a company go with a bank loan versus a bond? Well, first of all, bank loans often have a floating interest rate, whereas bonds often have a fixed interest rate. If the base rate set by the national authorities goes up or down, banks generally like to follow that so their interest rates tend to follow base rates. Loans often have more flexible terms and conditions. Because the loan is only made to one company and the other counterparty is just the one bank, it's much easier to come up with a bespoke contract that works perfectly for your company. Bonds however, have much more static terms and conditions. It's much more difficult to restructure a bond. It's much simpler to restructure a loan. Loans also have just a single counterparty, the bank. However, bonds have a broader investor base. You could have sold your bond to thousands of different investors. There's also lower administration for dealing with a bank. There's only a single counterparty. It's easy to have communication with them. With a very broad investor base, there's high administration and fixed costs in dealing with the many involved parties. So at the moment, it seems that a bank loan is much more attractive than a bond. So why does the bond market even exist? Well, the big difference is that broad investor base. Because there are many, many people willing to buy my debt, they're trying to attract me to sell my debt to them. How can they attract me? By charging a lower interest rate. There's only so many banks around. They're going to compete with each other a little bit but they're going to have a higher interest rate versus a bond. We also see bank loans having more restrictive covenants, those covenants put restrictions on the company, the kind of things they're allowed to do. So for instance, if you've raised a certain amount of debt with a bank, one of the covenants will be that you can't raise any more debt. Bonds have fewer restrictive covenants but they do have high regulatory requirements instead.