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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 MatchesUS Treasury bondUS Treasury bondUS government debt with a maturity of more than 10 years. Bond BuyerBond BuyerA daily publication featuring many essential statistics and index figures relevant to the fixed income markets. Shogun bondShogun bondDollar bond issued in Japan by a nonresident. Medium term bondMedium term bondA bond maturing in two to ten years. Dollar price of a bondDollar price of a bondPercentage of face value at which a bond is quoted. Further SuggestionsEurobondHigh 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 Prerefunded bond Collateralized Bond Obligation (CBO) Current income bonds Companion bonds |
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