Bond: Difference between revisions
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Revision as of 12:44, 20 June 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
- Advance payment bond
- Agent bank
- An introduction to debt securities
- Bank
- Bearer bond
- Bid bond = tender bond
- Blue bond
- Bond basis
- Bond equivalent yield
- Bond fund
- Bond futures
- Bond indenture
- Bond issue
- Bond mandate
- Bond market index
- Bond vigilante
- Bonding
- Bonding line
- Building society
- Bulldog bond
- Bridge to bond
- Callable bond
- Capital market
- Catastrophe bond
- Clean price
- Climate bond
- Collateralised Mortgage Obligation
- Conditional bond
- Convertible bonds
- Corporate bond
- Cost of debt
- Counter-indemnity
- Coupon
- Coupon bond
- Covered bond
- Credit rating
- Credit rating agency
- Credit support
- Customs bond
- Debenture
- Deep discount bond
- Default
- Depositary
- Digital bond
- Digital green bond
- Dim sum bond
- Documentation
- Domestic bond
- Dirty price
- Drop-lock bond
- Dual currency bond
- ESG bond
- Eurobond
- Exchangeable bond
- Fixed rate bond
- Floating rate note
- Foreign bond
- Formosa bond
- Gender bond
- Gilts
- Global bond
- Global note
- Government paper
- Green bond
- Green bond framework
- Green Bond Principles
- Green savings bond
- Greenium
- Guarantee
- High-yield bond
- Impact bond
- Indemnity
- Indenture
- Index linked bond
- Interest determination date
- Internal rate of return
- International bond
- Investment-grade bond
- Irredeemable bond
- Issue
- Jumbo
- Junk bond
- Labeled bond
- Loan
- Longer term
- Maple bond
- My word is my bond
- Nature performance bond (NPB)
- Net zero bond
- Nominal bond
- Non-equity security
- Note
- Obligation
- On-demand bond
- Outcome bond
- Panda bond
- Paper
- Par bond
- Par yield
- Paying agent
- Performance bond
- Performance guarantee
- Perpetual bond
- Premium
- Principal
- Private bond
- Public bond
- Redeemable bond
- Retail bond
- Retained bonds
- Retention bond
- Samurai bond
- Savings
- Seasoned bond
- Secured
- Securitisation
- Securitise
- Security
- Shallow discount bond
- Share
- Short term
- Silk Road bond
- Social bond
- Social Bond Principles
- Social impact bond
- Social inclusion bond
- Sovereign bond
- Sovereign social bond
- Standby letter of credit
- Straight bond
- Stock
- Stock exchange
- Sukuk
- Samurai bond
- Supranational bond
- Surety bond
- Sustainability bond
- Sustainability bond framework
- Sustainability Bond Guidelines
- Sustainability-linked bond
- Sustainable bond
- Sustainable bond framework
- Sustainable Bond Market
- Tender bond
- Thematic bond
- Trade finance
- Transition bond
- Trustee
- Use of proceeds bond
- Wholesale bond
- Yankee bond
- Yield
- Yield to maturity
- Zero coupon bond
