Corporate Bond: A bond issued by corporations to meet financial obligations or to acquire assets.
Treasury Bond: A federal registered or bearer obligation issued in denominations of $500 to $1 million with maturities ranging from five to thirty-five years and having a fixed interest rate.
TREASURY BILLS: They are sold at a discount from face value and mature at face value. Federal Reserve Bank holds weekly auctions. Firms and individuals use T-Bills to park cash and defer income taxes into the next calendar year. Taxes are paid when bills mature.
TREASURY NOTES: They pay semi-annual coupons like corporate bonds.
Bond Indenture: A document that defines the terms, or promises of a bond issuer, and guarantees certain rights to bondholders.
Coupon Rate: The specified interest rate payable to the bondholder. The coupon rate multiplied by the face value of the bond equals the coupon amount.
Debenture Bond: A bond not secured by a specific pledge of property. Assets that are not pledged specifically to secure other debt may be used to satisfy any debenture bondholder's claims.
Junk Bond: Also called junk or non-investment grade bonds, these bonds have low ratings (below BBB) or are in default. They usually carry a higher degree of risk and a higher potential yield than other bonds, and are often associated with excessive leveraging, corporate takeovers, and leveraged buyouts.
Maturity Date: Date at which a bond becomes due. Principal and any accrued interest due must be paid at this time.
Par Value: Face value of a security. For bonds, it usually signifies the figure on which interest is based and the amount that is redeemed on maturity.
Put Provision: Allows the bondholder the option of selling the bond back to the issuer at par value on specified dates.
Sinking Fund Requirement: A provision for repayment whereby the bond issuer retires a certain portion of