Bond

In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) and to repay the principal at a later date, referred to as  maturity. A bond is a formal contract to repay borrowed money with interest payable at pre-determined intervals. Thus a bond is like a loan: the holder of the bond is the lender (creditor), the issuer of the bond is the borrower (debtor), and the coupon is the interest. Bonds can be issued by corporations, as well as local and sovereign governments.

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