What is the definition of Bonds? π π
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.
Alright class, settle down now, letβs talk about βbonds,β somehow!
You've read the dictionary, thatβs a great start,
But letβs break it down with a little art.
βBondsβ represent a loan, you see,
From someone needing money, urgently!
The
issuer
, thatβs the borrower true,
Needs funds for projects, shiny and new.
They offer these βbonds,β a debt so grand,
To pay them back with interest, across the land!
When due, they'll make their payments clear,
And at πmaturityπ, the principal is near β
Returned to the holder, safe and sound,
As promised on the bondβs official ground.
Think of it like a promise, strong and bold,
A story in finance, waiting to unfold.
Now, βbond indenture,β don't you fret,
Itβs a legal document, carefully set!
It details all the rules, precise and neat,
The conditions binding, oh so sweet β or bittersweet!
And two types we have, for your knowledge bright:
Registered bonds
, with names in sight,
And
bearer bonds
, a bit more free,
Held by whoever has them, you see!
Do you have any questions? Don't be shy,
Letβs explore this concept, way up high!