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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 MatchesConsolidated mortgage bondConsolidated mortgage bondA bond that covers several units of property, sometimes refinancing mortgages on the properties. Guaranteed growth bondGuaranteed growth bondA bond in which a single premium secures a guaranteed amount at its maturity date. Convertible eurobondConvertible eurobondA eurobond that can be converted into another asset, often through exercise of attached warrants. Nine bond ruleNine bond ruleAn NYSE rule requiring that NYSE for nine NYSE or fewer stay on the floor for one hour to seek a NYSE. Industrial revenue bond (IRB)Industrial revenue bond (IRB)A bond issued by local government agencies on behalf of corporations. Further SuggestionsUnamortized bond discountBull bear bond Bond premium Long bonds Additional bonds test Joint bond Series E bond Split coupon bond Citizen bonds Series EE bond Bond value Bond indexing investment bond Blanket fidelity bond Subordinated bonds Revenue bond Treasury bonds Obligation bond Level coupon bond Lehman Brothers Government Bond Index Pure discount bond Put bond Twenty bond index Mismatch bond Stratified sampling bond indexing |
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