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Bond

AnalyticsTrade Team
AnalyticsTrade Team Last updated on 26 Apr 2023

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Bond

A bond is a debt security, in which the issuer owes the holder a debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the principal at a later date, termed maturity. Bonds are used by companies, municipalities, states and sovereign governments to finance projects and operations. Owners of bonds are debt holders, or creditors, of the issuer.

History of Bonds

The history of bonds dates back to the early days of civilization. The first recorded bond was issued by the Babylonian Empire in the 5th century BC. The bond was a promise to pay a certain amount of money to the holder of the bond at a specified date in the future. This type of bond was used to finance public works projects such as irrigation systems and roads. In the Middle Ages, bonds were used to finance wars and other military campaigns. In the modern era, bonds have become a popular way for governments and corporations to raise money for various projects.

Comparison of Bonds

Type of Bond Interest Rate Maturity
Corporate Bond Varies Varies
Government Bond Varies Varies
Municipal Bond Varies Varies

Summary

Bonds are debt securities that are used by companies, municipalities, states and sovereign governments to finance projects and operations. The history of bonds dates back to the early days of civilization and they have become a popular way for governments and corporations to raise money for various projects. The interest rate and maturity of bonds vary depending on the type of bond. For more information about bonds, you can visit websites such as Investopedia, The Balance, and Bloomberg.

See Also

  • Treasury Bond
  • Corporate Bond
  • Municipal Bond
  • Government Bond
  • Zero-Coupon Bond
  • Floating Rate Bond
  • High-Yield Bond
  • Convertible Bond
  • Callable Bond
  • Puttable Bond

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