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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 MatchesFidelity bondFidelity bondSee: Blanket fidelity bond Variable rated demand bond (VRDB)Variable rated demand bond (VRDB)Floating-rate bond that periodically can be sold back to the issuer. Samurai bondSamurai bondA yen-denominated bond issued in Tokyo by a non-Japanese borrower. Related: Bulldog bond and Yankee bond. Moral obligation bondMoral obligation bondA tax-exempt bond issued by a municipality or a state financial intermediary that is backed by the moral, but not legal, obligation of a state government to appropriate funds in case of default . Discount bondDiscount bondDebt sold for less than its principal value. If a discount bond pays no coupon, it is called a zero coupon bond. Further SuggestionsBond powerBond Buyer long bond Reset bonds guaranteed income bond general obligation bond income bond performance bond perpetual bond Lehman Brothers Aggregate Bond Index Taxable municipal bond General Mortgage Bond Flower bond Joint bond Step up bond Sour bond bond yield Ultra short term bond fund municipal bond TAC bonds bond interest yield Mortgage Bonds Irredeemable bond Cross border bonds Unlimited tax bond |
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