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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 MatchesPAC BondPAC BondStands for Planned Amortization Class bond. A tranche class offered by some CMOs that has a sinking fund schedule and an ability to make principal payments that are not subordinated to other classes. Arbitrage bondsArbitrage bondsMunicipality issued bonds issued intended to gain an interest rate advantage by refunding a higher-rate bond in ahead of their call date. Lower-rate refunding issue proceeds are invested in Treasuries until the first call date of the higher-rate issue. High coupon bond refundingHigh coupon bond refunding../../finance-glossary/ a high-coupon bond with a new, lower-coupon bond. US Treasury bondUS Treasury bondUS government debt with a maturity of more than 10 years. Toll revenue bondToll revenue bondA municipal bond that is repaid with revenues from tolls that are paid by users of the public project built with the bond revenue. Further SuggestionsSplit coupon bondConflict between bondholders and stockholders Eleven bond index Consolidated mortgage bond Secured bond Completion bonding Passive bond Moral obligation bond General Mortgage Bond Super sinker bond Coupon bond Premium bond Active bond crowd Bonds Enabling Annual Retirement Savings (BEARS) Bond counsel samurai bond Bond power Private purpose bond short bond Public housing authority bond Stratified sampling bond indexing Salomon Brothers Non US Dollar World Government Bond Index Story stock or bond Bond indenture Reset bonds |
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