Term(s) | Description |
---|---|
Issuer | A company that issues the Bond to investors in order to raise capital for its operations, expansion or other needs. |
Principal | The amount paid upfront by the investors to purchase Bond which will then be returned upon maturity. It is also known as nominal value or par value of a Bond. |
Maturity Date | The date in which the principal amount is repaid in full by the Issuer. |
Coupon | For coupon-bearing bonds, this is the stated interest rate that the Issuer will pay to the bond holders, usually on a semi-annual basis. As investors buy bond issues through a secondary market, the actual bond yield will differ from the coupon rate. |
Yield-to-Maturity | Internal Rate of Return that an investor would receive if they purchased the bond at the prevailing market price and held it to maturity. |
Bond Ratings | It measures the quality of the issuer and its ability to make debt repayments. |
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