bond certificate

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bond certificate

A financial advisor shows a client a bond certificate.

Definition
  1. Noun:
    • A formal document representing a loan made by an investor to a borrower (typically a government or corporation). It is a certificate of debt that obligates the issuer to pay the holder a fixed amount of interest at regular intervals and to repay the principal amount on a specified maturity date.
Usage
  • A bond certificate is a physical or electronic document that proves ownership of the debt.
  • It is issued to raise capital for projects or operations.
  • The key details on a bond certificate include the principal amount, the interest rate (coupon), the maturity date, and the issuer's name.
Examples
  • The company issued new bond certificates to finance the construction of its new factory.
  • Upon maturity, you must present the bond certificate to receive the final principal payment.
  • He keeps his valuable bond certificates in a secure safety deposit box.
Advanced Usage
  • Bearer bond certificate: A type of bond certificate that is owned by whoever holds the physical document. Interest and principal are paid to the bearer.
  • Registered bond certificate: A bond certificate registered in the owner's name with the issuing authority. Payments are made directly to the registered owner.
Variants and Related Words
  • Bond (n): The more common, general term for the debt instrument itself. A bond certificate is the documentary evidence of a bond.
  • Debenture (n): A type of bond that is not secured by physical collateral.
  • Coupon (n): The detachable part of a bond certificate that is presented to receive an interest payment.
Synonyms
  • Debt instrument
  • Fixed-income security
  • Note (in a financial context)
Related Phrases
  • To clip a coupon: A historical phrase referring to the act of detaching a coupon from a bond certificate to claim an interest payment.
  • Bond indenture: The legal contract associated with a bond issue, of which the bond certificate is a key part.
bond certificate

A financial advisor shows a client a bond certificate.

Noun
  1. a certificate of debt (usually interest-bearing or discounted) that is issued by a government or corporation in order to raise money; the issuer is required to pay a fixed sum annually until maturity and then a fixed sum to repay the principal

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