Bond Basics
A Q&A with Bennet Sedacca
Minyanville Media, Inc.
Part 1:What, Who, and Why?
What Are Bonds?
• An interest-bearing instrument which promises to pay a stated amount of money at some future date.
• Bonds are redeemed at the end of a term, called a maturity date. Some bonds have call dates. Issuers may call a bond earlier than its maturity date if it suits them at that time. Other bonds have put features. This is the opposite of a call date. Put allows the holder to sell the bond back to the issuer at a predetermined price before the stated maturity date.
• When you buy a bond, you are in effect “lending money” to the issuer, much like an “I.O.U.”
Who Issues Bonds and Why Are They Issued?
• Bonds are issued by many types of entities, ...
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