Bond

An interest-bearing security that obligates the issuer to pay a specified amount of interest for a specified time, usually several years, and then repay the bondholder the face amount of the bond.

Bonds are debt securities issued by corporations and governments.

Bonds are, in fact, loans that you and other investors make to the issuers in return for the promise of being paid interest, usually but not always at a fixed rate, over the loan term.

The issuer also promises to repay the loan principal at maturity, on time and in full.

Because most bonds pay interest on a regular basis, they are also described as fixed-income investments. While the term bond is used generically to describe all debt securities, bonds are specifically long-term investments, with maturities longer than ten years.

A long-term debt instrument with the promise to pay a specified amount of interest and to return the principal amount on a specified maturity date.

A certificate serving as security for payment of a debt. Bonds backed by mortgage loans are pooled together and sold in the secondary market.

1) written evidence of debt issued by a company with the terms of payment spelled out. A bond differs from corporate shares of stock since bond payments are pre-determined and provide a final payoff date, while stock dividends vary depending on profitability and corporate decisions to distribute. There are two types of suchbonds: "registered," in which the name of the owner is recorded by the company and "bearer," in which interest payments are made to whomever is holding thebond. 2) written guaranty or pledge which is purchased from a bonding company (usually an insurance firm) or by an individual as security (called a "bondsman") to guarantee some form of performance, including showing up in court ("bail bond"), properly complete construction or other contract terms ("performancebond"), that the bonded party will not steal or mismanage funds, that a purchased article is the real thing, or that title is good. If there is a failure then thebonding company will make good up to the amount of the bond.

See bail bond. A written agreement by which a person insures he/she will pay a certain sum of money if he/she does not perform certain duties.

An electrical connection that provides a low-resistance path between two conducting surfaces.

Acceptable proof of financial responsibility to act as an Ocean Transportation Intermediary in the international ocean transportation of cargo, typically issued by a surety company.