Bond

A bond, in finance terms, is a fixed income instrument that represents a loan made by an investor to a borrower, typically corporate or governmental. The borrower (issuer) issues a bond that includes the terms of the loan, interest payments, and the time at which the loaned funds (bond principal) must be paid back (maturity date). Bonds are used by companies, municipalities, states, and governments to finance projects and operations. Owners of bonds are debtholders, or creditors, of the issuer.