Bond

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1.

A marketable longer-term debt instrument 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 the market rate of return to the debt investor and 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.


2.

In trade finance, 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.


3.

A guarantee provided by one party to another.


4.

An amount of money provided as security for a guarantee.


See also