Bond: Difference between revisions

From ACT Wiki
Jump to navigationJump to search
(Add links.)
(Add link.)
 
(9 intermediate revisions by the same user not shown)
Line 1: Line 1:
1. ''Securities - debt''.
1. ''Securities - debt - capital markets''.


In the context of securities, a bond is a formal longer-term debt investment, usually tradeable, issued by a borrowing organisation and bought by a lender (= debt investor).
In the context of capital markets, a bond is a formal longer-term debt investment, usually tradeable, issued by a borrowing organisation and bought by a lender (= debt investor).




Line 10: Line 10:
The current market yield on the bond is both (1) the market rate of return to the debt investor and (2) the pre-tax market cost to the issuer of debt capital.   
The current market yield on the bond is both (1) the market rate of return to the debt investor and (2) the pre-tax market cost to the issuer of debt capital.   


Issuers of bonds include a wide range of corporate and public sector entities, including central governments.
Issuers of capital market bonds include a wide range of corporate and public sector entities, including central governments.




2. ''Trade finance - credit support''.
2.  ''Bank and building society deposits - retail - savings bond.''
 
The term bond is also used by banks and building societies for fixed term savings accounts, with fixed rates of interest for the term.
 
The interest rate payable to the retail customer is generally higher than for more flexible savings accounts.
 
Savings bonds are not tradeable.
 
 
3. ''Trade finance - credit support''.


In trade finance, a bond is an instrument issued by a bank or an insurance company, in favour of a buyer, on behalf of a supplier, as additional assurance to the buyer that the supplier will perform its obligations under the supply contract.   
In trade finance, a bond is an instrument issued by a bank or an insurance company, in favour of a buyer, on behalf of a supplier, as additional assurance to the buyer that the supplier will perform its obligations under the supply contract.   
Line 25: Line 34:




3. ''Risk management - guarantee.''
4. ''Risk management - guarantee.''


A guarantee provided by one party to another.
A guarantee provided by one party to another.




4. ''Risk management - collateral.''
5. ''Risk management - collateral.''


An amount of money provided as security for a guarantee.
An amount of money provided as security for a guarantee.
Line 39: Line 48:
* [[Agent bank]]
* [[Agent bank]]
* [[An introduction to debt securities]]
* [[An introduction to debt securities]]
* [[Bank]]
* [[Bearer bond ]]
* [[Bearer bond ]]
*[[Bid bond]]  = tender bond
*[[Bid bond]]  = tender bond
Line 53: Line 63:
* [[Bonding]]
* [[Bonding]]
* [[Bonding line]]
* [[Bonding line]]
* [[Building society]]
* [[Bulldog bond]]
* [[Bulldog bond]]
* [[Bridge to bond]]
* [[Bridge to bond]]
* [[Callable bond]]
* [[Callable bond]]
* [[Capital market]]
* [[Catastrophe bond]]
* [[Catastrophe bond]]
* [[Class B bond]]
* [[Clean price]]
* [[Clean price]]
* [[Climate bond]]
* [[Climate bond]]
Line 76: Line 89:
* [[Default]]
* [[Default]]
* [[Depositary]]
* [[Depositary]]
* [[Digital bond]]
* [[Digital green bond]]
* [[Dim sum bond]]
* [[Dim sum bond]]
* [[Documentation]]
* [[Documentation]]
Line 82: Line 97:
* [[Drop-lock bond]]
* [[Drop-lock bond]]
* [[Dual currency bond]]
* [[Dual currency bond]]
* [[Equity]]
* [[ESG bond]]
* [[ESG bond]]
* [[Eurobond]]
* [[Eurobond]]
Line 101: Line 117:
* [[Guarantee]]
* [[Guarantee]]
* [[High-yield bond]]
* [[High-yield bond]]
* [[Impact bond]]
* [[Indemnity]]
* [[Indemnity]]
* [[Indenture]]
* [[Indenture]]
Line 120: Line 137:
* [[Net zero bond]]
* [[Net zero bond]]
* [[Nominal bond]]
* [[Nominal bond]]
* [[Non-equity security]]
* [[Note]]
* [[Note]]
* [[Obligation]]
* [[Obligation]]
* [[On-demand bond]]
* [[On-demand bond]]
* [[Outcome bond]]
* [[Panda bond]]
* [[Panda bond]]
* [[Paper]]
* [[Paper]]
Line 140: Line 159:
* [[Retention bond]]
* [[Retention bond]]
* [[Samurai bond]]
* [[Samurai bond]]
* [[Savings]]
* [[Seasoned bond]]
* [[Seasoned bond]]
* [[Secured]]
* [[Secured]]
Line 172: Line 192:
* [[Tender bond]]
* [[Tender bond]]
* [[Thematic bond]]
* [[Thematic bond]]
* [[Trade finance]]
* [[Transition bond]]
* [[Trustee]]
* [[Trustee]]
* [[Use of proceeds bond]]
* [[Use of proceeds bond]]

Latest revision as of 04:51, 6 September 2024

1. Securities - debt - capital markets.

In the context of capital markets, a bond is a formal longer-term debt investment, usually tradeable, issued by a borrowing organisation and bought by a lender (= debt investor).


The bond is usually administered by a trustee.

Bonds typically require the issuer to repay the amount borrowed plus interest over a designated period of time.

The current market yield on the bond is both (1) the market rate of return to the debt investor and (2) the pre-tax market cost to the issuer of debt capital.

Issuers of capital market bonds include a wide range of corporate and public sector entities, including central governments.


2. Bank and building society deposits - retail - savings bond.

The term bond is also used by banks and building societies for fixed term savings accounts, with fixed rates of interest for the term.

The interest rate payable to the retail customer is generally higher than for more flexible savings accounts.

Savings bonds are not tradeable.


3. Trade finance - credit support.

In trade finance, a bond is an instrument issued by a bank or an insurance company, in favour of a buyer, on behalf of a supplier, as additional assurance to the buyer that the supplier will perform its obligations under the supply contract.

Such a bank bond or insurance company bond will be supported by an indemnity issued by the supplier in favour of the bank or insurance company.


Examples include advance payment bonds, bid bonds, customs bonds, performance bonds and retention bonds.

In this context, the terms "bond" and "guarantee" are often used interchangeably.


4. Risk management - guarantee.

A guarantee provided by one party to another.


5. Risk management - collateral.

An amount of money provided as security for a guarantee.


See also

Retrieved from ‘https://wiki.treasurers.org/w/index.php?title=Bond&oldid=56861’