bond

Definition

A document constituting evidence of a long-term debt, by which the bond issuer (the borrower) is obliged to pay interest when due, and repay the principal at maturity, as specified on the face of the bond certificate. The rights of the holder are specified in the bond indenture, which contains the legal terms and conditions under which the bond was issued. Bonds are available in two forms: registered bonds, and bearer bonds.

Etymology

From Middle English bond, a variant of band, from Old English beand, bænd, bend (“bond, chain, fetter, band, ribbon, ornament, chaplet, crown”), from Proto-Germanic *bandaz, *bandiz (“band, fetter”). Cognate with Dutch band, German Band, Swedish band. Doublet of Bund. Related to bind.

Example Sentences

• "Investors face a quandary. Cash offers a return of virtually zero in many developed countries; government-bond yields may have risen in recent weeks but they are still unattractive. Equities have suffered two big bear markets since 2000 and are wobbling again. It is hardly surprising that pension funds, insurers and endowments are searching for new sources of return."
• "Many say that government and corporate bonds are a good investment to balance against a portfolio consisting primarily of stocks."
• "The prisoner was brought before the tribunal in iron bonds."