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Bonds

A bond can be either a government security, or capital market debt security issued by a corporation.  A bond obligates the issuer to make periodic interest payments at a specified rate of interest, and to repurchase the bond at its full face value on its maturity date.  Bond holders are not investors, they are creditors.  Corporate bond issuers are borrowers.  Corporate bonds are evidence of a debt; typically a long-term debt with interest only owed until the maturity date.

© 2011 by Michael C. Dennis.  All Rights Reserved