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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 MatchesOptional payment bondOptional payment bondA bond whose principal and/or interest may be paid in foreign or domestic currency at the discretion of the bondholder. Consolidated mortgage bondConsolidated mortgage bondA bond that covers several units of property, sometimes refinancing mortgages on the properties. Bond market associationBond market associationAn international trade association of broke../../finance-glossary/broker and banks in US government and federal agency broker, municipal securities, broker, and broker securities. Automated bond system (ABS)Automated bond system (ABS)The computerized system that records bids and offers for inactively traded bonds until they are cancelled or executed on the NYSE. High coupon bond refundingHigh coupon bond refunding../../finance-glossary/ a high-coupon bond with a new, lower-coupon bond. Further Suggestionsmunicipal bond insuranceCitizen bonds Bond points investment bond short bond Convertible eurobond bulldog bond Dollar bonds Mortgage Bonds Medium term bond Utility revenue bond TAC bonds Deferred interest bond Bond mutual fund medium term bond Full coupon bond Bond agreement Nine bond rule Stripped bond Companion bonds Super sinker bond Savings bond Bonds Enabling Annual Retirement Savings (BEARS) Eurobond Policyholder loan bonds |
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