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BondA debt instrument, issued by a borrower and promising a specified stream of payments to the purchaser, usually regular interest payments plus a final repayment of principal. Bonds are exchanged on open markets including, in the absence of capital controls, internationally, providing a mechanism for international capital mobility.BondThe generic name for a tradable loan security issued by governments and companies as a means of raising capital.The bond guarantees its holder:repayment of capital at a future specified date (the maturity date)a fixed rate of interest (also known as the coupon)Government bonds are known as gilts or Treasury Stock.Bonds offer certainty of income, but may fail to keep pace with inflation.As far as the capital is concerned, you only know exactly how much your bond is worth if you plan to hold it to maturity (when you will be paid back the face value). But in the time between issue and maturity, a bond's value can be as volatile as a share, and if you plan to sell before maturity you run the risk of capital erosion. In general:Bond prices fall when bank interest rates go up (because the interest rate rise attracts money out of bonds into cash)Fear of rising inflation will cause bond prices to fall, because investors worry that bonds will not bring enough income to keep pace with inflationThe German and American bond markets have an effect on UK bond prices, because they are competing for the same institutional capital.Similar MatchesDollar bondsDollar bondsMunicipal revenue bonds for which quotes are given in dollar prices. Not to be confused with "US Dollar" bonds, a common term of reference in the Eurobond market. Bond agreementBond agreementA contract for privately placed debt. Variable rated demand bond (VRDB)Variable rated demand bond (VRDB)Floating-rate bond that periodically can be sold back to the issuer. Bond discountBond discountThe difference between a bond's face value and the lower market price.If the market price is higher than the face value, the difference is known as the bond premium.When interest rates rise, it is usual for bond prices to fall and when interest rates fall it is usual for bond prices to increase. Government bondGovernment bondSee: Government securities Further Suggestionsshort bondguaranteed growth bond Pickup bond Bond covenant Public housing authority bond Par bond bond yield Bond rating eurobond Completion bonding Irredeemable bond Bond crowd Bond Buyer Shogun bond Lehman Brothers Aggregate Bond Index Refunded bond investment bond Commodity backed bond guaranteed income bond Bulldog bond Brady bond Ultra short term bond fund Active bond crowd Bond Buyers municipal bond index Prior lien bond |
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