Bonds & Fixed Income

Interest that has accumulated on a bond since the last coupon payment date but has not yet been paid to the bondholder.

A bond issued by a government-sponsored enterprise (GSE) or federal agency, offering higher yields than Treasuries with near-government credit quality.

A bond that repays both principal and interest over its life through regular payments, rather than returning all principal at maturity.

A financial security collateralized by a pool of assets such as loans, leases, credit card debt, or receivables.

A bond issued with a face value below the standard $1,000 par, typically $25 or $50, making fixed income investing accessible to smaller investors.

A widely traded government bond used as a reference point for pricing other bonds and measuring yield spreads across the fixed income market.

A fixed-income debt security where investors loan money to an issuer in exchange for regular interest payments and return of principal at maturity.

When a bond trades below its face (par) value, typically because its coupon rate is lower than prevailing market interest rates.

A calculation that converts a bond's yield to an annualized semiannual basis, allowing comparison between bonds with different payment frequencies.

A mutual fund or ETF that invests primarily in bonds and other debt securities, providing diversification and professional management for fixed-income investors.

The legal contract between a bond issuer and bondholders that specifies the bond's terms, covenants, and the rights and obligations of each party.

An investment strategy that staggers bond maturities across multiple years to reduce interest rate risk and provide regular reinvestment opportunities.

When a bond trades above its face (par) value, typically because its coupon rate is higher than prevailing market interest rates.

A credit quality grade assigned by rating agencies (S&P, Moody's, Fitch) that assesses the issuer's ability to repay principal and interest.

The yield difference between a bond and a benchmark security (usually a Treasury), reflecting the additional risk compensation investors demand.

The return an investor earns from a bond, expressed as an annual percentage, which can be measured in several ways including current yield and yield-to-maturity.

A period during which a callable bond cannot be redeemed early by the issuer, protecting bondholders from premature loss of their investment.

A bond that gives the issuer the right to redeem it before maturity at a specified price, typically when interest rates fall.

Callable bonds give the issuer the right to redeem early, while putable bonds give the bondholder the right to sell back early — opposing options that benefit different parties.

The price of a bond excluding any accrued interest, which is the standard way bonds are quoted in the market.

A complex structured finance product that pools various debt instruments and repackages them into tranches with different risk levels and returns.

A bond that can be converted into a predetermined number of the issuer's common shares, combining fixed income with equity upside potential.

A measure of the curvature in the relationship between bond prices and yields, indicating how duration changes as interest rates move.

A debt security issued by a corporation to raise capital, paying periodic interest and returning principal at maturity.

The periodic interest payment made to bondholders, typically paid semiannually based on the bond's stated coupon rate and face value.

The annual interest rate stated on a bond, expressed as a percentage of face value, that determines the periodic coupon payments.

A bond backed by a dedicated pool of assets (typically mortgages) that remains on the issuer's balance sheet, providing dual recourse to investors.

The yield difference between a corporate bond and a risk-free government bond of similar maturity, reflecting the market's assessment of credit risk.

A bond's annual coupon payment divided by its current market price, providing a simple snapshot of income return.

An unsecured bond backed only by the issuer's general creditworthiness and reputation, without specific collateral pledged.

The probability that a bond issuer will fail to make scheduled interest or principal payments, potentially resulting in partial or total loss for bondholders.

The total price a bond buyer actually pays, including the clean (quoted) price plus any accrued interest since the last coupon payment.

A measure of a bond's price sensitivity to interest rate changes, expressed in years, indicating how much the price will move for a 1% change in rates.

The risk that changes in interest rates will cause significant fluctuations in bond prices, with longer-duration bonds facing greater price volatility.

An option feature built into a bond that gives either the issuer or the bondholder certain rights, affecting the bond's pricing and risk profile.

A bond issued in a currency different from the currency of the country where it is issued, allowing borrowers to access international capital markets.

An asset class of investments that provide regular, predetermined interest payments and return of principal, including bonds, CDs, and Treasury securities.

A bond whose coupon rate adjusts periodically based on a reference interest rate, providing protection against rising rates.

A bond specifically earmarked to fund environmentally beneficial projects such as renewable energy, clean transportation, or sustainable water management.

Bonds rated below investment grade (BB+ or lower) that offer higher interest rates to compensate for increased default risk.

A U.S. government savings bond with inflation protection, combining a fixed rate with a variable rate that adjusts every 6 months based on CPI.

A bond whose principal or coupon adjusts with inflation, preserving the investor's purchasing power regardless of price level changes.

A yield curve where short-term interest rates exceed long-term rates, often signaling an upcoming recession.

A bond rating of BBB-/Baa3 or higher, indicating relatively low credit risk and suitability for conservative investors.

A bond rated below investment grade (BB+/Ba1 or lower), offering higher yields to compensate for elevated default risk.

A call provision requiring the issuer to pay bondholders the present value of remaining cash flows, discounted at a Treasury rate plus a spread.

The date on which a bond's principal (face value) is repaid to the investor and interest payments cease.

A measure of a bond's price sensitivity to interest rate changes, expressed as the approximate percentage price change for a 1% change in yield.

A bond-like investment created by pooling mortgage loans and selling shares of the cash flows to investors.

A debt security issued by a state, city, or local government, typically offering interest income exempt from federal (and sometimes state) income tax.

The stated interest rate on a bond, expressed as a percentage of par value, without adjusting for inflation or market price changes.

The face value of a bond, typically $1,000, representing the amount repaid to the bondholder at maturity.

A bond with no maturity date that pays coupon interest indefinitely, valued primarily on its yield relative to prevailing rates.

A bond that gives the holder the right to sell the bond back to the issuer at par value on specified dates before maturity.

The return on a bond after adjusting for inflation, representing the actual increase in purchasing power for the investor.

The risk that cash flows from a bond (coupons or principal) will be reinvested at lower interest rates than the original investment.

A municipal bond repaid from the income generated by a specific project or facility, such as tolls, fees, or utility charges.

A yen-denominated bond issued in Japan by a non-Japanese entity, subject to Japanese regulations.

Debt that takes priority over other obligations in the event of default or bankruptcy, giving holders first claim on the issuer's assets.

A provision requiring the bond issuer to set aside money periodically to retire a portion of the debt before maturity.

A debt security issued by a national government, considered the benchmark for credit risk and interest rates in that country.

A bond with a coupon rate that increases at predetermined intervals over its life, providing rising income to investors.

Debt that ranks below senior debt in repayment priority, offering higher yields to compensate for the greater risk of loss in default.

U.S. Treasury bonds whose principal adjusts with inflation (CPI), protecting investors from the erosion of purchasing power.

A short-term U.S. government debt security with a maturity of one year or less, sold at a discount and redeemed at face value.

A long-term U.S. government debt security with a maturity of 20 or 30 years, paying semiannual coupon interest.

A medium-term U.S. government debt security with a maturity of 2 to 10 years, paying semiannual coupon interest.

A U.S. dollar-denominated bond issued in the United States by a foreign entity, registered with the SEC.

A graphical representation of interest rates across different maturities for bonds of similar credit quality, typically U.S. Treasuries.

The total annualized return an investor earns if a bond is held until maturity, accounting for coupon payments, purchase price, and par value at redemption.

A bond that pays no periodic interest, instead sold at a deep discount and redeemed at full face value at maturity.