Bonds are like loans you give to governments or companies. In return, they promise to repay the money you lent and interest. This basic overview of bonds is designed to help you understand the concept and how they work. Understanding
Bonds
Complete Bond Features. What You Need To Know.
Bond features differ from bond to bond. These features ultimately affect the risk and return we get when we buy bonds. For example, we differentiate bonds based on their issuer, which can come from corporations, governments, or
Collateral: How it Works and Why It Matters
What's it: Collateral is a borrower's asset pledged when taking out a loan. They agreed to turn it over to the lender when they defaulted on the loan. For lenders, it aims to secure loan repayments and reduce the impact of a default. Meanwhile,
Sovereign Risk: Meaning, Indicators, How It is Measured
What's it: Sovereign risk is credit risk attached to the sovereign debt where the government in a country will not pay its debt. It may be because the government doesn't have the ability or will to do so. Long story short, it is the default risk on
Securitized Bonds: Meaning, Types, Benefits
Securitized bonds are bonds where coupon and interest payments come from a collection of other underlying assets. For example, a bank pools its mortgage into debt securities. This security is what we call securitized bonds. In a simple model of
Bond Issuers: Who Are They?
Bond issuers come from national governments, local governments, quasi-governmental institutions, supranational institutions, and companies. Each has a different default risk. For example, government default bonds are considered less risky than
Bonds: Types, Features, Risks, Pros, and Cons
What's it: Bonds are debt securities with a promise to pay back the principal at maturity and pay coupons regularly. They usually mature in more than 10 years. And we distinguish them with notes, which have a maturity of 10 years or less. Next,