BOND ISSUE Meaning and
Definition
-
A bond issue refers to the process through which a government, corporation, or other entity raises capital by selling bonds to investors.
Bonds are debt securities issued to investors, typically offering interest payments at a fixed rate over a specified period of time. The bond issuer sets the terms, including the interest rate, maturity date, and redemption price. When a bond issue occurs, the issuer sells a predetermined amount of bonds to the public or institutional investors in the primary market. Individuals or entities purchasing these bonds become bondholders, lending money to the issuer in exchange for periodic interest payments.
Bond issues can serve various purposes, such as funding major infrastructure projects, supporting government spending, or financing corporate expansion plans. Governments often rely on bond issues to finance public projects like building roads, bridges, schools, and hospitals. Similarly, corporations may issue bonds to access capital for mergers and acquisitions, research and development, or operational expenses.
The key features of a bond issue include the face value, coupon rate, maturity date, and issuing entity. The face value represents the principal amount that the issuer agrees to repay upon maturity. The coupon rate determines the interest rate paid to bondholders, usually expressed as a percentage of the face value. The maturity date specifies the period after which the issuer will redeem the bond, repaying the face value to investors. The issuing entity refers to the government or corporation responsible for selling the bond issue.
Bond issues play a crucial role in financial markets, allowing governments and corporations to raise funds and provide investors with a relatively stable fixed-income investment option.
Common Misspellings for BOND ISSUE
- vond issue
- nond issue
- hond issue
- gond issue
- bind issue
- bknd issue
- blnd issue
- bpnd issue
- b0nd issue
- b9nd issue
- bobd issue
- bomd issue
- bojd issue
- bohd issue
- bons issue
- bonx issue
- bonc issue
- bonf issue
- bonr issue
Etymology of BOND ISSUE
The etymology of the word "bond issue" can be traced back to Old English and Middle English.
The term "bond" originated from the Old English word "bonda", which meant "householder" or "freeholder". In Middle English, the word "bond" evolved to specifically refer to a written obligation or agreement.
The word "issue" comes from the Old French word "issue", meaning "exit" or "outcome". In English, it began to be used in the 14th century to refer to the act of sending something out or releasing something.
When these two terms are combined, "bond issue" refers to the act of releasing or offering bonds for sale to investors or the market. It is typically used in the context of governments, corporations, or other entities raising capital by issuing bonds.
Similar spelling word for BOND ISSUE
Infographic
Add the infographic to your website:
