Bond Definition

Definition: It refers to a certificate of indebtedness issued by a corporation or government under which the issuer promises to repay borrowed money to the lender as fixed rate of interest (coupons) at specific periods and the principal at the maturity date. In other words, a bond is a loan in the form of a security following different terms and conditions. In this case the lender is the bond holder, the issuer is the borrower and finally the coupon is the interest.