Bonds are debt and are issued for a period of more than one year. The U.S. government, local governments, water districts, companies and many other types of institutions sell bonds. When an investor buys bonds, he or she is lending money. The seller of the bond agrees to repay the principal amount of the loan at a specified time. Interest-bearing bonds pay interest periodically. The New York Times Financial Glossary
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bond bond [bɒnd ǁ bɑːnd] noun [countable]
1. FINANCE an amount of money borrowed by a government or an organization. The government or organization produces a document promising that it will pay back the money that it has borrowed, usually with interest. The document, which can be bought and sold, is also called a bond:
• Many investors switched out of shares into bonds yesterday.
— see also Premium Bond a bond that is actively traded after it is first sold:
• Prices of active bonds declined, ending with losses of about 1/8 to 1/4 point.
1. in the US, a bond with a value of $1,000 or less
2. a way of saving money for children by investing it in bonds so that they can receive it when they reach a particular age:
• the With-Profit Baby Bond Plan from the Tunbridge Wells Equitable Friendly Society
a bond where the owner is considered to be the person who has it in their possession, whose name may not be recorded on an official list of owners
— compare registered bond a government bond whose movements are considered to show the probable future direction of the bond market as a whole, and whose price is used to refer to prices of other bonds:
• The bonds were priced at a spread of 1.2 percentage points above the Treasury's 30-year bellwether bond.
a bond issued in pounds on the British markets by a non-British borrower
a bond that can be repaid when the borrower chooses, within the conditions made known when it is sold
a bond that has been repaid before the usual time
a bond that can be repaid by a company in the form of shares in the company:
• Convertible bonds, which are bonds that can be converted into stock at a later date, jumped 32% last year.
a bond issued by a company:
• Yields on corporate bonds are more attractive than on Treasuries at the moment.
ˈEurodollar ˌbond also ˈeuro bond FINANCE
a bond sold in a currency which is not that of the borrower's country, usually US dollars:
• Sumitomo will issue 500 billion yen of yen bonds and $2 billion of Eurodollar bonds.
a bond in a foreign company, that is sold in currency of the country where it is issued
a bond issued by a government:
• Prices of French government bonds soared yesterday in heavy trading.
a bond where you invest a sum for a fixed period of time, and the financial institution promises that the return will not be below a particular amount. Guaranteed income bonds are sometimes combined with life insurance:
• A £3000 investment in the five-year guaranteed income bond from Pinnacle Insurance will earn 6.4% net of basic rate tax.
ˈguaranty bond also guarenˈteed bond FINANCE
a bond where the amount of money and the interest are guaranteed by someone other than the person who gave it to you, used especially in bonds related to large investments:
• Mr. Davies claims he helped Mr. Parretti secure a guaranty bond for a major loan but was never paid the $1,750,000 premium he was owed.
a bond that pays a regular income in the form of interest
ˈindexed bond also ˈstabilized bond FINANCE
a bond
Issued by a government where the interest rate follows changes in the
consumer price index (= the rate of increase of prices of goods that people buy)
a bond with a high rate of interest, but with a high risk of not being repaid:
• He estimates that 38% of junk bonds will default at some point.
a bond that will be repaid if necessary by selling a particular piece of the bond issuer's property
a bond issued by a state or local government authority, usually in the US:
• Rhode Island's municipal bonds held firm.
a bond which is sold at the value it was given when it was sold for the first time :
• Because most individuals prefer par bonds, the demand for those securities often causes them to become overpriced.
a bond that has the name of the holder officially recorded by the company that has
Issued it
— compare bearer bondˈSamurai bond [ˈsæmʊraɪ ˌbɒnd ǁ -ˌbɑːnd] FINANCE
a bond issued in yen on the Japanese markets by a non-Japanese borrower:
• The Ukraine hopes to issue Samurai bonds in Japan in September.
a government bond sold to encourage people to save and invest small amounts of money:
• US savings bonds cannot be redeemed before six months has elapsed.
ˈstabilized bond also stabilised bond FINANCE
a bond Issued by a country that is not the United Kingdom, but payable in British pounds
a bond which
mature S (= becomes due for payment) after a short period of time of between 3 and 5 years, although it is expected to make the same amount of profit as investments which take longer to mature
ˈsushi bond [ˈsuːʆi bɒːnd ǁ -bɑːnd] FINANCE
a bond with a fixed rate of interest, sold by Japanese companies usually to Japanese institutional investors in a foreign currency, usually US dollars
ˈTreasury bond also ˈT-bond FINANCE
a bond issued by the US federal government
a bond issued in dollars on the US markets by a non-US borrower
ˈyearling bond also yearling FINANCE
money borrowed by a
local authority in the form of a bond that must be paid back within a year:
• The duration of local authority bonds is typically between one and five years, although most are for one year and are known as yearling bonds.
a bond bought at well below its actual value. It does not pay interest during its life, but the gain is made when it is resold;
= ZERO:
• Zero-coupon bonds, though they put nothing in investors' pockets, can still generate tax liability.
2. LAW a contract in which someone agrees to pay a sum of money if they do not do something they have promised to do:
• Importers of Mexican cement must post bonds (= leave money with a court ) to cover penalties that may apply later.
a sum of money that is sometimes left with a court when someone
appeal S (= asks the court to change a decision it has made). If the appeal is not successful, the person loses their money
a sum of money left with a court when an accused person is waiting for trial. If the person does not return for trial, they lose the money:
• The judges decided to double the bail bonds for protesters who get arrested.
a sum of money that the lowest bidder on a project pays to the developer to cover extra costs that the developer will have if the bidder later refuses to do the work:
• The company withdrew from bidding for the hospital project, and its $6 million bid bond was returned.
another name for a performance bond
the general name given to all bonds that promise to pay money to someone if someone else does not perform a specific duty
a sum of money provided by an organization that is working on a contract to another organization. The contractor loses this money if they fail to carry out the work in the contract correctly
a formal agreement in which one person or company promises to pay another company's debts if that company fails to do so:
• The loan is backed by a surety bond issued by Financial Guaranty Insurance Corp.
an official document where an importer promises to pay import taxes to the authorities for particular goods:
• With this computerised system, the holder of the customs bond can be informed immediately the consignment arrives.
4. INSURANCE used to talk about certain types of insurance contract
an insurance policy providing insurance for damage caused by any of a company's employees
an insurance agreement that provides insurance against the risk that a project, for example a film or a property development, will not be completed or that it will cost more than planned:
• The company has SKr2.4 billion in completion bonds for continuing military projects.
an insurance policy taken out by an organization against illegal acts by its employees, for example
fraud:
• Most small businesses lack fidelity bonds and other forms of loss insurance.
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A bond is a legal contract in which a government, company or institution (the
borrower) issues an IOU certificate, which promises to pay holders a specific rate of interest for a fixed duration and then redeem the contract at face value on maturity. In theory bonds are safer than equities because they have a fixed maturity and are repaid before any payments are made to shareholders. But if a company fails, its bond holders suffer just as much as its shareholders.
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bond UK US /bɒnd/ noun
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FINANCE a 10-year/20-year, etc. bond »
The first new bond is a 10-year bond, paying a 6.5% interest rate and repayable on Oct. 25, 2021.
buy/invest in/sell/trade bonds »
We have kept sufficient money in a building society account so we will not be forced to sell our bonds.
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Legislation was introduced to allow indigenous peoples to issue bonds to finance economic-development projects.
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Some investors cannot hold bonds that carry a rating worse than A.
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INSURANCE »
Contractors registered with the state are required to have liability insurance and a bond.
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US LAW »
To safeguard the environment, mine operators must post a bond to pay for possible cleanups.