Bond

 

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Bond

A 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.

Bond

The 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 Matches

US Treasury bond

US Treasury bond

US government debt with a maturity of more than 10 years.


Bond Buyer

Bond Buyer

A daily publication featuring many essential statistics and index figures relevant to the fixed income markets.


Shogun bond

Shogun bond

Dollar bond issued in Japan by a nonresident.


Medium term bond

Medium term bond

A bond maturing in two to ten years.


Dollar price of a bond

Dollar price of a bond

Percentage of face value at which a bond is quoted.


Further Suggestions

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High coupon bond refunding
Bearer bond
Lehman Brothers Corporate Bond Index
Stripped bond
Taxable municipal bond
Series bond
Low coupon bond refunding
perpetual bond
Bond market association
Payment in kind (PIK) bond
Treasury bonds
Bond power
bond anticipation note
Fidelity bond
Bond rating
Parallel bonds
Bond agreement
eurobond
Pure discount bond
International bonds
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Collateralized Bond Obligation (CBO)
Current income bonds
Companion bonds


 
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