1.1. Non-Sovereign Bonds
a. The bonds issued by all the levels of government below the national level such as state government, municipal government, provincial governments, etc are called the non-sovereign bonds.
b. These bonds are called by different names in different countries.
c. The non-sovereign bonds have ranging tax treatments in different countries.
d. The non-sovereign bonds have a higher yield than the sovereign bonds, but they have lower credit ratings (lower than the sovereign bonds, but still a very high rating in comparison to the corporate bonds).
1.2. Supernational Bonds
a. These are the bonds issued by the supernational or multilateral agencies.
b. These are usually the plain vanilla bonds.
c. These bonds may be used as a benchmark for the countries with a non-liquid sovereign bonds market.
1.3. Quasi-Government Bonds
a. These are also called agency bonds. These are issued by the agencies owned and controlled by the government. But these agencies issue the bonds in their name and not in the name of the government.
b. These bonds are not really guaranteed by the sovereign government; however, such a guarantee is implied.
c. These bonds are repaid by the cash flows generated by the agency or the entity.