Securities

Securities Bond Stock Investment fund Derivative Structured finance Agency security

Markets Stock market Futures market Foreign exchange market Commodity market Spot market Over-the-counter market (OTC)

Bonds by coupon Fixed rate bond Floating rate note Zero-coupon bond Inflation-indexed bond Commercial paper Perpetual bond

Bonds by issuer Corporate bond Government bond Municipal bond Pfandbrief

Equities (stocks) Stock Share Initial public offering (IPO) Short selling

Investment funds Mutual fund Index fund Exchange-traded fund (ETF) Closed-end fund Segregated fund Hedge fund

Structured finance Securitization Asset-backed security Mortgage-backed security Commercial mortgage-backed security Residential mortgage-backed security Tranche Collateralized debt obligation Collateralized fund obligation Collateralized mortgage obligation Credit-linked note Unsecured debt Agency security

Derivatives Option Warrant Futures Forward contract Swap Credit derivative Hybrid security

v t e

In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) to use and/or to repay the principal at a later date, termed maturity. A bond is a formal contract to repay borrowed money with interest at fixed intervals (semi annual, annual, sometimes monthly).^[1]

Thus a bond is like a loan: the holder of the bond is the lender (creditor), the issuer of the bond is the borrower (debtor), and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term investments, or, in the case of government bonds, to finance current expenditure. Certificates of deposit (CDs) or commercial paper are considered to be money market instruments and not bonds.

Bonds and stocks are both securities, but the major difference between the two is that (capital) stockholders have an equity stake in the company (i.e., they are owners), whereas bondholders have a creditor stake in the company (i.e., they are lenders). Another difference is that bonds usually have a defined term, or maturity, after which the bond is redeemed, whereas stocks may be outstanding indefinitely. An exception is a consol bond, which is a perpetuity (i.e., bond with no maturity).

In the UK, "bond" is also used to refer to a time deposit with a bank or building society, which in general is not marketable and is subject to different tax treatment from the bonds discussed here.

Issuance[link]

Bonds are issued by public authorities, credit institutions, companies and supranational institutions in the primary markets. The most common process of issuing bonds is through underwriting. In underwriting, one or more securities firms or banks, forming a syndicate, buy an entire issue of bonds from an issuer and re-sell them to investors. The security firm takes the risk of being unable to sell on the issue to end investors. Primary issuance is arranged by bookrunners who arrange the bond issue, have direct contact with investors and act as advisers to the bond issuer in terms of timing and price of the bond issue. The bookrunners' willingness to underwrite must be discussed prior to opening books on a bond issue as there may be limited appetite to do so.

In the case of government bonds, these are usually issued by auctions, called a public sale, where both members of the public and banks may bid for bond. Since the coupon is fixed, but the price is not, the percent return is a function both of the price paid as well as the coupon.^[2] However, because the cost of issuance for a publicly auctioned bond can be cost prohibitive for a smaller loan, it is also common for smaller bonds to avoid the underwriting and auction process through the use of a private placement bond. In the case of a private placement bond, the bond is held by the lender and does not enter the large bond market. ^[3]

Sometimes the documentation allows the issuer to borrow more at a later date by issuing further bonds on the same terms as before, but at the current market price. This is called a tap issue or bond tap.^[4]

Features[link]

The most important features of a bond are,

• nominal, principal, par or face amount — the amount on which the issuer pays interest, and which, most commonly, has to be repaid at the end of the term. Some structured bonds can have a redemption amount which is different from the face amount and can be linked to performance of particular assets such as a stock or commodity index, foreign exchange rate or a fund. This can result in an investor receiving less or more than his original investment at maturity.
• issue price — the price at which investors buy the bonds when they are first issued, which will typically be approximately equal to the nominal amount. The net proceeds that the issuer receives are thus the issue price, less issuance fees.
• maturity date — the date on which the issuer has to repay the nominal amount. As long as all payments have been made, the issuer has no more obligation to the bond holders after the maturity date. The length of time until the maturity date is often referred to as the term or tenor or maturity of a bond. The maturity can be any length of time, although debt securities with a term of less than one year are generally designated money market instruments rather than bonds. Most bonds have a term of up to thirty years. Some bonds have been issued with maturities of up to one hundred years, and some do not mature at all. In the market for U.S. Treasury securities, there are three groups of bond maturities:
  • short term (bills): maturities between one to five year; (instruments with maturities less than one year are called Money Market Instruments)
  • medium term (notes): maturities between six to twelve years;
  • long term (bonds): maturities greater than twelve years.
• coupon — the interest rate that the issuer pays to the bond holders. Usually this rate is fixed throughout the life of the bond. It can also vary with a money market index, such as LIBOR, or it can be even more exotic. The name coupon originates from the fact that in the past, physical bonds were issued which had coupons attached to them. On coupon dates the bond holder would give the coupon to a bank in exchange for the interest payment. Coupons can be paid at different frequencies. It is generally semi-annual or annual.

Bond issued by the Dutch East India Company in 1623

• The "quality" of the issue refers to the probability that the bondholders will receive the amounts promised at the due dates. This will depend on a wide range of factors.
  • Indentures and Covenants — An indenture is a formal debt agreement that establishes the terms of a bond issue, while covenants are the clauses of such an agreement. Covenants specify the rights of bondholders and the duties of issuers, such as actions that the issuer is obligated to perform or is prohibited from performing. In the U.S., federal and state securities and commercial laws apply to the enforcement of these agreements, which are construed by courts as contracts between issuers and bondholders. The terms may be changed only with great difficulty while the bonds are outstanding, with amendments to the governing document generally requiring approval by a majority (or super-majority) vote of the bondholders.
  • High yield bonds are bonds that are rated below investment grade by the credit rating agencies. As these bonds are more risky than investment grade bonds, investors expect to earn a higher yield. These bonds are also called junk bonds.
• coupon dates — the dates on which the issuer pays the coupon to the bond holders. In the U.S. and also in the U.K. and Europe, most bonds are semi-annual, which means that they pay a coupon every six months.
• Optionality: Occasionally a bond may contain an embedded option; that is, it grants option-like features to the holder or the issuer:
  • Callability — Some bonds give the issuer the right to repay the bond before the maturity date on the call dates; see call option. These bonds are referred to as callable bonds. Most callable bonds allow the issuer to repay the bond at par. With some bonds, the issuer has to pay a premium, the so called call premium. This is mainly the case for high-yield bonds. These have very strict covenants, restricting the issuer in its operations. To be free from these covenants, the issuer can repay the bonds early, but only at a high cost.
  • Putability — Some bonds give the holder the right to force the issuer to repay the bond before the maturity date on the put dates; see put option. These are referred to as retractable or putable bonds.
  • call dates and put dates—the dates on which callable and putable bonds can be redeemed early. There are four main categories.
    • A Bermudan callable has several call dates, usually coinciding with coupon dates.
    • A European callable has only one call date. This is a special case of a Bermudan callable.
    • An American callable can be called at any time until the maturity date.
    • A death put is an optional redemption feature on a debt instrument allowing the beneficiary of the estate of the deceased to put (sell) the bond (back to the issuer) in the event of the beneficiary's death or legal incapacitation. Also known as a "survivor's option".
• sinking fund provision of the corporate bond indenture requires a certain portion of the issue to be retired periodically. The entire bond issue can be liquidated by the maturity date. If that is not the case, then the remainder is called balloon maturity. Issuers may either pay to trustees, which in turn call randomly selected bonds in the issue, or, alternatively, purchase bonds in open market, then return them to trustees.
• convertible bond lets a bondholder exchange a bond to a number of shares of the issuer's common stock.
• exchangeable bond allows for exchange to shares of a corporation other than the issuer.

Types[link]

Bond certificate for the state of South Carolina issued in 1873 under the state's Consolidation Act.

The following descriptions are not mutually exclusive, and more than one of them may apply to a particular bond.

• Fixed rate bonds have a coupon that remains constant throughout the life of the bond.
• Floating rate notes (FRNs) have a variable coupon that is linked to a reference rate of interest, such as LIBOR or Euribor. For example the coupon may be defined as three month USD LIBOR + 0.20%. The coupon rate is recalculated periodically, typically every one or three months.
• Zero-coupon bonds pay no regular interest. They are issued at a substantial discount to par value, so that the interest is effectively rolled up to maturity (and usually taxed as such). The bondholder receives the full principal amount on the redemption date. An example of zero coupon bonds is Series E savings bonds issued by the U.S. government. Zero-coupon bonds may be created from fixed rate bonds by a financial institution separating ("stripping off") the coupons from the principal. In other words, the separated coupons and the final principal payment of the bond may be traded separately. See IO (Interest Only) and PO (Principal Only).
• Inflation linked bonds, in which the principal amount and the interest payments are indexed to inflation. The interest rate is normally lower than for fixed rate bonds with a comparable maturity (this position briefly reversed itself for short-term UK bonds in December 2008). However, as the principal amount grows, the payments increase with inflation. The United Kingdom was the first sovereign issuer to issue inflation linked Gilts in the 1980s. Treasury Inflation-Protected Securities (TIPS) and I-bonds are examples of inflation linked bonds issued by the U.S. government.

Receipt for temporary bonds for the state of Kansas issued in 1922

• Other indexed bonds, for example equity-linked notes and bonds indexed on a business indicator (income, added value) or on a country's GDP.
• Asset-backed securities are bonds whose interest and principal payments are backed by underlying cash flows from other assets. Examples of asset-backed securities are mortgage-backed securities (MBS's), collateralized mortgage obligations (CMOs) and collateralized debt obligations (CDOs).
• Subordinated bonds are those that have a lower priority than other bonds of the issuer in case of liquidation. In case of bankruptcy, there is a hierarchy of creditors. First the liquidator is paid, then government taxes, etc. The first bond holders in line to be paid are those holding what is called senior bonds. After they have been paid, the subordinated bond holders are paid. As a result, the risk is higher. Therefore, subordinated bonds usually have a lower credit rating than senior bonds. The main examples of subordinated bonds can be found in bonds issued by banks, and asset-backed securities. The latter are often issued in tranches. The senior tranches get paid back first, the subordinated tranches later.
• Perpetual bonds are also often called perpetuities or 'Perps'. They have no maturity date. The most famous of these are the UK Consols, which are also known as Treasury Annuities or Undated Treasuries. Some of these were issued back in 1888 and still trade today, although the amounts are now insignificant. Some ultra-long-term bonds (sometimes a bond can last centuries: West Shore Railroad issued a bond which matures in 2361 (i.e. 24th century) are virtually perpetuities from a financial point of view, with the current value of principal near zero.
• Bearer bond is an official certificate issued without a named holder. In other words, the person who has the paper certificate can claim the value of the bond. Often they are registered by a number to prevent counterfeiting, but may be traded like cash. Bearer bonds are very risky because they can be lost or stolen. Especially after federal income tax began in the United States, bearer bonds were seen as an opportunity to conceal income or assets.^[5] U.S. corporations stopped issuing bearer bonds in the 1960s, the U.S. Treasury stopped in 1982, and state and local tax-exempt bearer bonds were prohibited in 1983.^[6]
• Registered bond is a bond whose ownership (and any subsequent purchaser) is recorded by the issuer, or by a transfer agent. It is the alternative to a Bearer bond. Interest payments, and the principal upon maturity, are sent to the registered owner.
• Treasury bond, also called government bond, is issued by the Federal government and is not exposed to default risk. It is characterized as the safest bond, with the lowest interest rate. A treasury bond is backed by the “full faith and credit” of the federal government. For that reason, this type of bond is often referred to as risk-free.
• 

  

  Pacific Railroad Bond issued by City and County of San Francisco, CA. May 1, 1865
  Municipal bond is a bond issued by a state, U.S. Territory, city, local government, or their agencies. Interest income received by holders of municipal bonds is often exempt from the federal income tax and from the income tax of the state in which they are issued, although municipal bonds issued for certain purposes may not be tax exempt.
• Build America Bonds (BABs) is a new form of municipal bond authorized by the American Recovery and Reinvestment Act of 2009. Unlike traditional municipal bonds, which are usually tax exempt, interest received on BABs is subject to federal taxation. However, as with municipal bonds, the bond is tax-exempt within the state it is issued. Generally, BABs offer significantly higher yields (over 7 percent) than standard municipal bonds.^[7]
• Book-entry bond is a bond that does not have a paper certificate. As physically processing paper bonds and interest coupons became more expensive, issuers (and banks that used to collect coupon interest for depositors) have tried to discourage their use. Some book-entry bond issues do not offer the option of a paper certificate, even to investors who prefer them.^[8]
• Lottery bond is a bond issued by a state, usually a European state. Interest is paid like a traditional fixed rate bond, but the issuer will redeem randomly selected individual bonds within the issue according to a schedule. Some of these redemptions will be for a higher value than the face value of the bond.
• War bond is a bond issued by a country to fund a war.
• Serial bond is a bond that matures in installments over a period of time. In effect, a $100,000, 5-year serial bond would mature in a $20,000 annuity over a 5-year interval.
• Revenue bond is a special type of municipal bond distinguished by its guarantee of repayment solely from revenues generated by a specified revenue-generating entity associated with the purpose of the bonds. Revenue bonds are typically "non-recourse," meaning that in the event of default, the bond holder has no recourse to other governmental assets or revenues.
• Climate bond is a bond issued by a government or corporate entity in order to raise finance for climate change mitigation or adaptation related projects or programs.

Foreign currencies[link]

Some companies, banks, governments, and other sovereign entities may decide to issue bonds in foreign currencies as it may appear to be more stable and predictable than their domestic currency. Issuing bonds denominated in foreign currencies also gives issuers the ability to access investment capital available in foreign markets. The proceeds from the issuance of these bonds can be used by companies to break into foreign markets, or can be converted into the issuing company's local currency to be used on existing operations through the use of foreign exchange swap hedges. Foreign issuer bonds can also be used to hedge foreign exchange rate risk. Some foreign issuer bonds are called by their nicknames, such as the "samurai bond." These can be issued by foreign issuers looking to diversify their investor base away from domestic markets. These bond issues are generally governed by the law of the market of issuance, e.g., a samurai bond, issued by an investor based in Europe, will be governed by Japanese law. Not all of the following bonds are restricted for purchase by investors in the market of issuance.

• Eurodollar bond, a U.S. dollar-denominated bond issued by a non-U.S. entity outside the U.S^[9]
• Yankee bond, a US dollar-denominated bond issued by a non-US entity in the US market
• Kangaroo bond, an Australian dollar-denominated bond issued by a non-Australian entity in the Australian market
• Maple bond, a Canadian dollar-denominated bond issued by a non-Canadian entity in the Canadian market
• Samurai bond, a Japanese yen-denominated bond issued by a non-Japanese entity in the Japanese market
• Uridashi bond, a non-yen-demoninated bond sold to Japanese retail investors.
• Shibosai Bond, a private placement bond in Japanese market with distribution limited to institutions and banks.
• Shogun bond, a non-yen-denominated bond issued in Japan by a non-Japanese institution or government^[10]
• Bulldog bond, a pound sterling-denominated bond issued in London by a foreign institution or government
• Matrioshka bond, a Russian rouble-denominated bond issued in the Russian Federation by non-Russian entities. The name derives from the famous Russian wooden dolls, Matrioshka, popular among foreign visitors to Russia
• Arirang bond, a Korean won-denominated bond issued by a non-Korean entity in the Korean market^[11]
• Kimchi bond, a non-Korean won-denominated bond issued by a non-Korean entity in the Korean market^[12]
• Formosa bond, a non-New Taiwan Dollar-denominated bond issued by a non-Taiwan entity in the Taiwan market^[13]
• Panda bond, a Chinese renminbi-denominated bond issued by a non-China entity in the People's Republic of China market^[14]
• Dim sum bond, a Chinese renminbi-denominated bond issued by a Chinese entity in Hong Kong. Enables foreign investors forbidden from investing in Chinese corporate debt in mainland China to invest in and be exposed to Chinese currency in Hong Kong.^[15]
• Huaso bond, a Chilean peso-denominated bond issued by a non-Chilean entity in the Chilean market.^[16]
• Kauri bond, a New Zealand dollar-denominated bond issued by a non-New Zealand entity in the New Zealand market.^[17]

Reckoning[link]

The interest rate that the issuer of a bond must pay is influenced by a variety of factors, such as current market interest rates, the length of the term and the creditworthiness of the issuer.

These factors are likely to change over time, so the market price of a bond will vary after it is issued. This price is expressed as a percentage of nominal value. Bonds are not necessarily issued at par (100% of face value, corresponding to a price of 100), but bond prices converge to par when they approach maturity (if the market expects the maturity payment to be made in full and on time) as this is the price the issuer will pay to redeem the bond. This is referred to as "Pull to Par". At other times, prices can be above par (bond is priced at greater than 100), which is called trading at a premium, or below par (bond is priced at less than 100), which is called trading at a discount. Most government bonds are denominated in units of $1000 in the United States, or in units of £100 in the United Kingdom. Hence, a deep discount US bond, selling at a price of 75.26, indicates a selling price of $752.60 per bond sold. (Often, in the US, bond prices are quoted in points and thirty-seconds of a point, rather than in decimal form.) Some short-term bonds, such as the U.S. Treasury Bill, are always issued at a discount, and pay par amount at maturity rather than paying coupons. This is called a discount bond.

The market price of a bond is the present value of all expected future interest and principal payments of the bond discounted at the bond's redemption yield, or rate of return. That relationship defines the redemption yield on the bond, which represents the current market interest rate for bonds with similar characteristics. The yield and price of a bond are inversely related so that when market interest rates rise, bond prices fall and vice versa. Thus the redemption yield could be considered to be made up of two parts: the current yield (see below) and the expected capital gain or loss: roughly the current yield plus the capital gain (negative for loss) per year until redemption.

The market price of a bond may include the accrued interest since the last coupon date. (Some bond markets include accrued interest in the trading price and others add it on explicitly after trading.) The price including accrued interest is known as the "full" or "dirty price". (See also Accrual bond.) The price excluding accrued interest is known as the "flat" or "clean price".

The interest rate adjusted for (divided by) the current price of the bond is called the current yield (this is the nominal yield multiplied by the par value and divided by the price). There are other yield measures that exist such as the yield to first call, yield to worst, yield to first par call, yield to put, cash flow yield and yield to maturity.

The relationship between yield and maturity for otherwise identical bonds is called a yield curve. A yield curve is essentially a measure of the term structure of bonds.

Bonds markets, unlike stock or share markets, often do not have a centralized exchange or trading system. Rather, in most developed bond markets such as the U.S., Japan and western Europe, bonds trade in decentralized, dealer-based over-the-counter markets. In such a market, market liquidity is provided by dealers and other market participants committing risk capital to trading activity. In the bond market, when an investor buys or sells a bond, the counterparty to the trade is almost always a bank or securities firm acting as a dealer. In some cases, when a dealer buys a bond from an investor, the dealer carries the bond "in inventory." The dealer's position is then subject to risks of price fluctuation. In other cases, the dealer immediately resells the bond to another investor.

Bond markets can also differ from stock markets in that, in some markets, investors sometimes do not pay brokerage commissions to dealers with whom they buy or sell bonds. Rather, the dealers earn revenue by means of the spread, or difference, between the price at which the dealer buys a bond from one investor—the "bid" price—and the price at which he or she sells the same bond to another investor—the "ask" or "offer" price. The bid/offer spread represents the total transaction cost associated with transferring a bond from one investor to another.

Investing in bonds[link]

Bonds are bought and traded mostly by institutions like central banks, sovereign wealth funds, pension funds, insurance companies and banks. Most individuals who want to own bonds do so through bond funds. Still, in the U.S., nearly 10% of all bonds outstanding are held directly by households.

Sometimes, bond markets rise (while yields fall) when stock markets fall. More relevantly, the volatility of bonds (especially short and medium dated bonds) is lower than that of stocks. Thus bonds are generally viewed as safer investments than stocks, but this perception is only partially correct. Bonds do suffer from less day-to-day volatility than stocks, and bonds' interest payments are often higher than the general level of dividend payments. Bonds are liquid – it is fairly easy to sell one's bond investments, though not nearly as easy as it is to sell stocks – and the comparative certainty of a fixed interest payment twice per year is attractive. Bondholders also enjoy a measure of legal protection: under the law of most countries, if a company goes bankrupt, its bondholders will often receive some money back (the recovery amount), whereas the company's stock often ends up valueless. However, bonds can also be risky but less risky than stocks:

• Fixed rate bonds are subject to interest rate risk, meaning that their market prices will decrease in value when the generally prevailing interest rates rise. Since the payments are fixed, a decrease in the market price of the bond means an increase in its yield. When the market interest rate rises, the market price of bonds will fall, reflecting investors' ability to get a higher interest rate on their money elsewhere — perhaps by purchasing a newly issued bond that already features the newly higher interest rate. Note that this drop in the bond's market price does not affect the interest payments to the bondholder at all, so long-term investors who want a specific amount at the maturity date do not need to worry about price swings in their bonds and do not suffer from interest rate risk.

Bonds are also subject to various other risks such as call and prepayment risk, credit risk, reinvestment risk, liquidity risk, event risk, exchange rate risk, volatility risk, inflation risk, sovereign risk and yield curve risk.

Price changes in a bond will also immediately affect mutual funds that hold these bonds. If the value of the bonds held in a trading portfolio has fallen over the day, the value of the portfolio will also have fallen. This can be damaging for professional investors such as banks, insurance companies, pension funds and asset managers (irrespective of whether the value is immediately "marked to market" or not). If there is any chance a holder of individual bonds may need to sell his bonds and "cash out", interest rate risk could become a real problem (conversely, bonds' market prices would increase if the prevailing interest rate were to drop, as it did from 2001 through 2003^[18]. One way to quantify the interest rate risk on a bond is in terms of its duration. Efforts to control this risk are called immunization or hedging.

• Bond prices can become volatile depending on the credit rating of the issuer – for instance if the credit rating agencies like Standard & Poor's and Moody's upgrade or downgrade the credit rating of the issuer. A downgrade will cause the market price of the bond to fall. As with interest rate risk, this risk does not affect the bond's interest payments (provided the issuer does not actually default), but puts at risk the market price, which affects mutual funds holding these bonds, and holders of individual bonds who may have to sell them.

• A company's bondholders may lose much or all their money if the company goes bankrupt. Under the laws of many countries (including the United States and Canada), bondholders are in line to receive the proceeds of the sale of the assets of a liquidated company ahead of some other creditors. Bank lenders, deposit holders (in the case of a deposit taking institution such as a bank) and trade creditors may take precedence.

There is no guarantee of how much money will remain to repay bondholders. As an example, after an accounting scandal and a Chapter 11 bankruptcy at the giant telecommunications company Worldcom, in 2004 its bondholders ended up being paid 35.7 cents on the dollar^{[citation needed]}. In a bankruptcy involving reorganization or recapitalization, as opposed to liquidation, bondholders may end up having the value of their bonds reduced, often through an exchange for a smaller number of newly issued bonds.

• Some bonds are callable, meaning that even though the company has agreed to make payments plus interest towards the debt for a certain period of time, the company can choose to pay off the bond early. This creates reinvestment risk, meaning the investor is forced to find a new place for his money, and the investor might not be able to find as good a deal, especially because this usually happens when interest rates are falling.

Bond indices[link]

A number of bond indices exist for the purposes of managing portfolios and measuring performance, similar to the S&P 500 or Russell Indexes for stocks. The most common American benchmarks are the Barclays Capital Aggregate (ex Lehman Aggregate), Citigroup BIG and Merrill Lynch Domestic Master. Most indices are parts of families of broader indices that can be used to measure global bond portfolios, or may be further subdivided by maturity and/or sector for managing specialized portfolios.

See also[link]

• Bond market
• Bond fund
• Bond market index
• Bond credit rating
• Collective action clause
• Debenture
• Deferred financing costs
• GDP-linked bond
• Immunization (finance)
• Short rate model
• Promissory note

Market specific:

• Brady Bonds
• Build America Bonds
• Eurobond

General:

• Criticism of debt
• Fixed income
• List of accounting topics
• List of economics topics
• List of finance topics

References[link]

External links[link]

• Bonds links at the Open Directory Project

v t e Corporate finance and investment banking Capital structure Senior secured debt · Senior debt · Second lien debt · Subordinated debt · Mezzanine debt · Convertible debt · Exchangeable debt · Preferred equity · Warrant · Shareholder loan · Common equity · Pari passu Transactions (terms / conditions) Equity offerings Initial public offering (IPO) · Secondary market offering (SEO) · Follow-on offering · Rights issue · Private placement · Spin out · Equity carve-out · Greenshoe (Reverse) · Book building · Bookrunner · Underwriter Mergers and acquisitions Takeover · Reverse takeover · Tender offer · Proxy fight · Poison pill · Staggered board · Squeeze out · Tag-along right · Drag-along right · Pre-emption right · Control premium · Due diligence · Divestment · Sell side · Buy side · Demerger · Super-majority · Pitch book Leverage Leveraged buyout · Leveraged recap · Financial sponsor · Private equity · Bond offering · High-yield debt · DIP financing · Project finance · Debt restructuring Valuation Financial modeling · Free cash flow · Business valuation · Fairness opinion · Stock valuation · APV · DCF · Net present value (NPV) · Cost of capital (Weighted average) · Comparable company analysis · Accretion/dilution analysis · Enterprise value · Tax shield · Minority interest · Associate company · EVA · MVA · Residual Income · Terminal value · Real options valuation List of investment banks · List of finance topics

Look up bond in Wiktionary, the free dictionary.

Bond, bonds, bonded, and bonding may refer to:

• Peace-bonding, something which makes a weapon unusable as a weapon

Fiduciary[link]

• Bond market
• Bond (finance), in finance, a type of debt security
  • Government bond, a bond issued by a national government
    • War bonds, a type of government bond used to raise funding for a war effort
  • Municipal bond, a bond issued by a city or local government
  • Corporate bond, a bond issued by a corporation
  • Mortgage bond, in South Africa a bond or mortgage bond is the usual term for property mortgage.
• Insurance bond (or investment bond), a life assurance-based single premium investment
• Surety bond, a three party contract, where the surety promises to pay the obligee for non-performance or dishonesty by the principal
  • Performance bond, a surety bond for completion of work under a contract
  • Bail bond agent, or bail bondsman, a person or corporation providing a surety bond for return of a person to a court
• Tenancy bond (or damage deposit), a deposit taken by a landlord in relation to rental of a property
• Catastrophe bond (or cat bond), a form of reinsurance
• Bonded labor (or debt bondage), a system of servitude where someone must work to pay off a debt
• Bond of association, a basic building block of credit unions and co-operative banks
• Bond vigilante, a form of political protest by selling bonds

Judiciary[link]

• Peace bond, a protection order from a Canadian court
• Bond of manrent, a Scottish clan treaty
• Bond of Association, a British legal document from the 16th century
• Bond v. United States (2000), a U.S. Supreme Court case regarding the fourth amendment
• Bond v The Queen, a 2000 High Court of Australia case

Physical sciences[link]

• Bond number, in fluid mechanics, a dimensionless number expressing the ratio of gravitational forces to surface tension forces
• Chemical bond, the physical phenomenon of chemical substances being held together by attraction of atoms
  • Covalent bond, between nonmetals
  • Ionic bond, between metal and nonmetals
  • Metallic bond, between metals
• Bond albedo, a measure of the electromagnetic radiation reflected from an astronomical body
• Bond graph, a graphical description of a physical dynamic system
• Bond fluctuation model, a lattice model for simulating the conformation and dynamics of polymer systems
• The Bond (Chinese constellation), both a mansion in the White Tiger constellation and an asterism within that mansion
• Bond Crater, a crater on Mars

Social sciences[link]

• Pair bond, in biology, the strong affinity that develops in some species between the male and female in a breeding pair, or, sometimes, between individuals of the same sex
  • Human bonding
  • Maternal bond
  • Paternal bond
  • Male bonding
  • Female bonding
  • Affectional bond

Anthropology[link]

• Village-bonded society
• Land-bonded society
• Lineage-bonded society

Manufacturing, construction and electronics[link]

• Bond, the manner in which the bricks overlap as they are laid in brickwork
• Bond paper, a high quality durable writing paper
• Bonded leather (or reconstituted leather)
• Bottled in bond, referring to a type of American whiskey
• Bond store, another name for bonded warehouse, where alcohol may be held without tax under strict conditions
• "Bonding" may refer to a method for creating electric interconnects:
  • Chip bonding, method of wiring some chips (also from different manufactures) together on die an integrated circuit
  • Wire bonding, a method of making interconnections between a microchip and the outside world as part of semiconductor device fabrication
  • Ball bonding, a method very similar to wire bondin
• Channel bonding (or modem bonding), an arrangement in which two or more network interfaces on a host computer are combined
  • NIC bonding, an alternate name for link aggregation
• Electrical bonding, practice of connecting all metal objects in a room to protect from electric shock

Company and product names[link]

• Bond (sheep), Australian breed of sheep
• Bond (wine), California cult wine producer
• Bonds (clothing), Australian clothing company
• Bond Clothing Stores, a former New York clothing company
• Bonds, formerly the name of a department store in Norwich, England, now called John Lewis Norwich
• Bonds, formerly the name of a department store in Chelmsford, Essex, now called Debenhams Chelmsford
• Bond Arms, a Texas gun manufacturer
• Bond Aviation Group, a British helicopter operator
  • Bond Offshore Helicopters, a subsidiary of the above
• Bond Cars Ltd, a small scale car manufacturer between 1949 and 1971:
  • Bond 875, three-wheeled motor car
  • Bond Bug, three-wheeled motor car
  • Bond Equipe, their first four-wheeled motor car
  • Bond Minicar, three-wheeled motor car
• BOND, RAD software tool
• Bond Street (cigarette), brand of cigarette
• The Bond Electraglide electric guitar, manufactured by Bond Guitars
• Bond Market Association, the former international trade association for the bond market industry
• Bond Wireless, an Australian wireless company

Organizations[link]

• Afrikaner Bond, a political party in the Cape Colony in the 19th century
• bonding-studenteninitiative e.V., a German student organisation
• Church of the Universal Bond, a British religious group
• Brotherhood Organization of a New Destiny (BOND), created By Rev. Jesse Lee Peterson
• Bond (for international development), the membership body for UK-based NGOs working in international development.

Entertainment[link]

• The James Bond series of spy fiction originally created by Ian Fleming
  • James Bond (character), a British secret agent who is the central character in the series
  • James Bond novels, the original literary works by Fleming, plus works by other authors after Fleming's death (usually commissioned by the owner of the Fleming copyrights, a company now known as Ian Fleming Publications)
  • James Bond film series, a popular series of 23 films featuring Fleming's secret agent
  • Bond girl, the 'love' interest in a James Bond film
• Campion Bond, the fictional character from The League of Extraordinary Gentlemen
• Bond (band), an Australian/British string quartet
  • Bond: Video Clip Collection, a video collection from the band
• The Bond, a film by Charlie Chaplin supporting Liberty bonds'
• "The Bonding", a third-season episode of Star Trek: The Next Generation
• Bond Street (film), a 1948 British film

Places[link]

• Bond Street, a major shopping street in the West End of London
  • Bond Street tube station
• Bond University, Gold Coast, Australia
  • Bond South Africa, South African campus of Bond University
• Bond Education Group, Toronto, Ontario
• Bond Head, Regional Municipality of Durham, Ontario
• Bond Head, Simcoe County, Ontario, part of Bradford West Gwillimbury, Ontario
• Bond Island, Queensland, an island in the Torres Strait
• Bond Inlet, a body of water in Nunavut's Qikiqtaaluk Region in Canada
• Bonds, Lancashire, an English village

United States[link]

• Bond, Colorado
• Bond County, Illinois
  • Bond County Community Unit School District 2
• Bond Township, Lawrence County, Illinois
• Bond, Mississippi
• Bond Hill, Ohio
• Bond Court Building, the former name of a highrise in Cleveland, Ohio
• Bond Falls, a waterfall in the Ontonagon River, Michigan
  • Bond Falls Scenic Site, a state park for the above waterfall
• Mount Bond, a mountain in Grafton County, New Hampshire
• Bond's Chapel Methodist Episcopal Church, an historic church in Missouri
• Bond House (disambiguation), various National Registered Historic Places in the United States

People[link]

• Alan Bond (businessman) (born 1938), Australian businessman
• Edward Bond (born 1934) English playwright
• Edward A. Bond (1849–1929), NY State Engineer and Surveyor 1899-1904
• Edward August Bond (1813–1898), English scientist
• Francis Bond Head (1792–1875), Lieutenant-Governor of Upper Canada
• Gerald Bond (1909–1965), South African Test cricketer
• George Phillips Bond (1825–1865), American astronomer, son of William Cranch Bond (below)
• Graham Bond (1937–1974), an English musician, considered a founding father of the English rhythm and blues boom of the 1960s
• James Bond (ornithologist) (1900–1989), American ornithologist
• Julia Bond (born 1987), American porn star
• Kit Bond (born 1939), senior United States Senator of Missouri and member of the Republican Party
• John Bond (Born 1939), Irish American Business man, proprietor of "BOND45" restaurant, managing director of "Bond NYC" Properties
• Michael Bond (born 1926), English children's author
• Nigel Bond (born 1965), English snooker player
• Oliver Bond (died 1797), Irish revolutionary
• Ruskin Bond, Author
• Samantha Bond (born 1961), English actress, best known for her role of Miss Moneypenny in the fictional James Bond movies
• Shane Bond, Cricketer
• Steve Bond, Actor
• Ward Bond (1903–1960), American actor
• William Cranch Bond (1789–1859), American astronomer, father of George Phillips Bond (above)
• William K. Bond (1792–1864), American politician
• Bond Baronets
  • Sir Thomas Bond, 1st Baronet
  • Sir James Bond, 1st Baronet

See also[link]

• Bonds (disambiguation)
• Bonde (disambiguation)
• Bondage (disambiguation)
• Bond Street (disambiguation)
• James Bond (disambiguation)
• Bond Head (disambiguation)
• Guarantee

This disambiguation page lists articles associated with the same title. If an internal link led you here, you may wish to change the link to point directly to the intended article.

Paul Wilmott (born 8 November 1959)^[1] is a researcher, consultant and lecturer in quantitative finance.^[2] He is best known as the author of various academic and practitioner texts on risk and derivatives,^[2] and for Wilmott magazine and Wilmott.com [1], a quantitative finance portal.

After an undergraduate degree in mathematics from St Catherine's College, Oxford, Wilmott stayed on to get a DPhil in fluid mechanics, and went on to work on mathematical modelling for various industries before going into quantitative finance. He is currently the co-owner and Course Director for the Certificate in Quantitative Finance (CQF), a half year distance learning course on mathematical finance at 7City Learning, a London-based company providing training for the financial services industry.^[3] He is a founding partner of Caissa Capital, a volatility arbitrage hedge fund.^[4] He is on the editorial board of the academic journal International Journal of Theoretical and Applied Finance.^[5] He founded the Diploma in Mathematical Finance at Oxford University;^[6] and the journal Applied Mathematical Finance.^[7] He is a director of Wilmott Electronic Media, which manages Wilmott.com, a website for the quantitative analyst community, and is a director of Paul & Dominic Quant Recruitment.^[8]

He has written research articles on finance and mathematics, and, amongst others, has authored the following books:

• Frequently Asked Questions in Quantitative Finance (Wiley 2009)
• Paul Wilmott On Quantitative Finance (Wiley 2006)
• Paul Wilmott Introduces Quantitative Finance (Wiley 2007)
• Frequently Asked Questions in Quantitative Finance (Wiley 2007)
• With J.N.Dewynne and S.D.Howison, Mathematics of Financial Derivatives: a Student Introduction. (Cambridge University Press 1995).
• With Dominic Connor, Paul & Dominic's Guide to Quant Careers.

Together with Emanuel Derman, Paul Wilmott is one of the authors of the Financial Modelers' Manifesto.^[9]

He studied mathematics at St Catherine’s College, Oxford University, where he received his D.Phil in Applied mathematics in 1985.^[10]

See also[link]

• Financial Engineering
• Mathematical finance

References[link]

External links[link]

• Profile on wilmott.com
• Certificate in Quantitative Finance

This article's use of external links may not follow Wikipedia's policies or guidelines. Please improve this article by removing excessive or inappropriate external links, and converting useful links where appropriate into footnote references. (August 2010)

• opinion piece: New York Times
• Interview: Condé Nast Portfolio
• In Business Week
• Bonus Babies in New York Times
• Revenge of the Nerd
• Paul Wilmott says nothing has changed with the banks, CNBC
• The maths of the credit crunch