|
Bonds
(Source: Encyclopedia of Banking
and Finance)
Introduction
Bond Market
Bond Ratings (Member section)
Corporate Bond Ratings (Member
section)
Municipal Bond Analysis (Member
section)
Introduction
An interest-bearing certificate of debt, being one of a series constituting
a loan made to, and an obligation of, a government or business corporation;
a formal promise by the borrower to pay to the lender a certain sum of
money at a fixed future day with or without security, and signed and sealed
by the maker (borrower); a promise to pay a principal amount on
a stated future date and a series of interest payments, usually semiannually
until the stated future date; "all subdivided interest-bearing
contracts for the future payment of money that are drawn with formality
whether they are secured or unsecured, whether the interest is imperative
under all conditions, or not, as in the case of income bonds" (L.
Chamberlain, The Principles of Bond Investment).
The difference between a
bond and promissory note is aptly explained by F.A. Cleveland (Funds and
Their Uses) as follows:
The only way that a bond
is distinguished from an ordinary promissory note is by the fact that
it is issued as part of a series of like tenor and amount, and, in most
cases, under a common security. By rule of common law the bond is
also more formal in its execution. The note is a simple promise
(in any form, so long as a definite promise for the payment of money appears
upon its face), signed by the party bound, without any formality as to
witnesses or seal. The bond, on the other hand, in its old common-law
form, required a seal and had to be witnessed in the same manner as a
deed or other formal conveyance of property, and though assignable was
not negotiable. This is still the rule with many jurisdictions.
We provide more information in
our Member Area. Subscribe
as Member
Recommended further reading:
Bankers Acceptance
Commercial
Paper
Discounting of bank
guarantees (BG's)
(Redeeming for cash or raising a credit line)
Guarantees
Introduction
to Institutional Trading
Introduction to Bank
Debenture Trading Programs
Zero Coupons and STRIPS
More
detailed information on Bonds
Terms
of use
Copyright by Integro
Internet Solutions (Pty) Ltd
|
