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.
A bond, issued and underwritten by international syndicates of banks and issuing houses and sold to investors (such as multinational corporations) outside the country in whose currency it is denominated. A eurobond is normally payable to the bearer and is free of tax.
Bull bear bondBull bear bond
Bond whose principal repayment is linked to the price of another security. The bonds are issued in two tranches: In the first tranche repayment increases with the price of the other security, and in the second tranche repayment decreases with the price of the other security.
Pickup bondPickup bond
A bond with a relatively high coupon that is close to the date at which it is callable, meaning that a fall in interest rates will most likely cause early redemption of the bond at a premium.
Bearer bondBearer bond
A bond which does not record its owner's name. Possession of the bond certificate is therefore the only proof of ownership. Dividends are claimed by submitting a detachable coupon to the paying agent.
Special bond accountSpecial bond account
A special broker margin account used only for transactions in US government bonds, municipals, and eligible listed and unlisted non-convertible corporate bonds.
Further SuggestionsPrerefunded bond
Series EE bond
Commodity backed bond
Dollar price of a bond
general obligation bond
municipal bond insurance
guaranteed growth bond