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In finance, a bond is a type of security under which the issuer owes the holder a debt, and is obliged – depending on the terms – to provide cash flow to the creditor (e.g. repay the principal (i.e. amount borrowed) of the bond at the maturity date as well as interest (called the coupon) over a specified amount of time. [1])
United States Savings Bonds are debt securities issued by the United States Department of the Treasury to help pay for the U.S. government's borrowing needs. They are considered one of the safest investments because they are backed by the full faith and credit of the United States government. [ 1 ]
"Fixed income securities" can be distinguished from inflation-indexed bonds, variable-interest rate notes, and the like. If an issuer misses a payment on fixed income security, the issuer is in default , and depending on the relevant law and the structure of the security, the payees may be able to force the issuer into bankruptcy .
Often overlooked by retail investors, TIPS, or Treasury Inflation-Protected Securities, are U.S. government-backed, fixed-income securities that offer inflation protection – and often more.
Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt ...
A government bond or sovereign bond is a form of bond issued by a government to support public spending. It generally includes a commitment to pay periodic interest , called coupon payments , and to repay the face value on the maturity date.
In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events but offer higher yields than investment-grade bonds in order to compensate for the increased risk.
Asset-backed securities, or ABS, are securities backed by a pool of fundamental assets. Typically, the pool of assets is a small group of loans or debt obligations that cannot be sold to ...